Strong Fundamentals for Farmland

May 6, 2010 05:40 PM
The Global Ag Investing conference sponsored by HighQuest Partners and SoyaTech brought 400 private equity and fund managers from 23 countries to New York this week. Energy and enthusiasm are high as they seek deals that will yield high returns while providing an inflation hedge and reduced risk because farmland doesn't move in coordination with stocks and bonds.
The fundamentals for farmland are strong and incontestible, said Hunt Stookey of HighQuest Partners. He cites the growing population and growing economies, as well as the fact that farmland is lost to development every year.
North America captures some 26% of the $15 billion in institutional capital that is invested through private investment vehicles, he reports, second only to South America's 37%. Row crops represent 83%, protein and dairy, 13% and "other” 4%.
Not only will this support prices, but it represents opportunity for established producers willing to lease or manage investor-owned land. There is a shortage of good operators to manage such land, reported Greg Duerksen, president of Kincannon & Reed, an executive search firm.

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