Interested In Farmland, Anyone Else?

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10/18/2020 Redacted Redacted

INTERESTED IN FARMLAND, ANYONE ELSE?

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intermediary University of Pennsylvania - The Wharton School - 10/18/2020

^[redacted]‌ I looked at farmland values and cash rental rates a year ago for a client, specifically in Ohio and Iowa. Cash rents for good cropland in Iowa were about 3-4% of land value. There's potential appreciation in addition to the cash yield but total expected return was only 5-8% annually. It's better than a bond yield but much less than an investor in a typical search fund would expect.

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searcher Purdue University - 10/18/2020

I'd be curious where/why you're looking? To Barry's point, you really shouldn't expect more than ~7% return, but it could be a strong hedge against inflation. I own land in Indiana that my family still operates and would be happy to connect if you have any interest in opportunities there.

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- 10/19/2020

Hey guys, thanks for the feedback. Mr. Lomont, you are correct sir, I would love to have this in my portfolio.

Mr. Baker, I actually got excited at those returns!

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intermediary University of Pennsylvania - The Wharton School - 10/20/2020

Just want to note that my range was based on historical data that included a period of strong appreciation. Cash rents are fairly stable but price changes can be quite volatile. Here are a couple links that might be useful.

Farmland Values, Land Ownership, and Returns to Farmland, [redacted]
https://www.ers.usda.gov/webdocs/publications[redacted]err-245.pdf?v=8044.1

2019 Farmland Value Survey Iowa State University
https://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html

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searcher Johns Hopkins University Pittsburg State University - 10/20/2020

Let me know if you want to chat more about this Charles, I'm in the process of closing on some pasture land in Kansas that is split between cattle grazing and conservation payments.

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