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Billion Dollar Checkbooks Still Buying Farmland

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Touch the Soil News #705 (feature photo – Ethiopian women picking beans – source, Executive office of the President of the U.S. 2005) The Australian Government recently released the latest statistics about who is buying Australian Farmland. As of the 2015-2016 farming year, foreign investment in Australian farmland hit $4.6 billion, up from $2.5 billion the year before. It is interesting to see where the foreign buyers were coming from. The top four buyers were: American investors bought $1.3 billion in Australian farmland Chinese investors bought $996 million in Australian farmland U.K investors bought $338 million in Australian farmland Canadian investors bought $240 million in Australian farmland   So how…

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Who Is Interested in “Cherry” Picking Farmland?

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Touch the Soil News #493 (feature photo – ripe almond nuts CC 2.5) If your contacts are many and people know you are in the business, you can create an agricultural empire by buying good farms. That seems to be the strategy of Gladstone Land Corporation. This Wall-Street investment company – focused on owning productive farmland – was organized in January of 2013. Gladstone made news recently when it acquired two large California almond farms totaling 2,485 acres. The purchase price of $27.5 million represents about $11,000 per acre. The farms are located in Stanislaus County – in the central heart of California. Stanislaus County’s economy is primary agricultural with…

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Investors and the Growing Food Demand

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Touch the Soil News #488 (feature photo CC 2.0) Milltrust International is a global investment management company with headquarters in London and Singapore. They have a special division that deals in agricultural (farmland) investments. The CEO of Milltrust, Simon Hopkins, recently participated in a revealing interview about the growing investments in agricultural assets. Following are some of the highlights of Hopkins’ remarks: This past year saw the birth of the 7th billion person on the planet and the global population is generally expected to exceed 9 billion people by 2050. According to the scientists, the world is currently sustainable with a population of somewhere between 300 million and 2 billion, depending…

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The Stakes in Berry Farms Are Getting Higher

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Touch the Soil News #461 Many of our parents and grandparents were used to going out in the country and picking berries right off the farm – it was called u-pick. Today, many home gardeners still plant berries and enjoy them off the vine. As an industrial agricultural crop, berries represent a huge capital investment in terms of land, labor, chemicals, fertilizers, harvest and cold storage. The highly perishable nature of berries represents a costly undertaking in terms of transport, extending shelf life and risk of spoilage. The point of this discussion is that berry production requires large amounts of capital – and that’s where Wall Street comes in. While…

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European Union – Our Farm is Not Big Enough

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Touch the Soil News #453 Many nations around the world (and some continents) do not have enough farmland to feed themselves. So whether they import food or try to own farmland overseas, the realization is the same – the homeland farm is not big enough. Friends of the Earth (Europe) recently released a watershed report: The True Cost of Consumption – The EU’s Land Footprint. They wanted to know how much farmland the European Union is short of when it comes to providing food for all of its citizens. Cover of the report. The True Cost of Consumption – The EU’s Land Footprint is the first of its kind in…

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Farmland – On the Pulse of Capital

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Touch the Soil News #451 The role of capital today is a double-edged sword. Yes, raising capital to launch an enterprise is important. After the enterprise is launched, it is cash flow that is the key. However, capital always seeks to take out more than it puts in. After extensive research, estimates are that in the U.S. there is about $95 trillion of capital seeking to feed off a $19 trillion dollar annual economy. This large volume of capital seeks to limit the largest contributor to a nation’s cash flows – cut wages, jobs and benefits. Payroll slips generate some 70 percent of a nation’s cash flows. So, anyone in business…

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Two Interesting Food Production Transactions

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Touch the Soil News #432 “We have built our farmland portfolio based on the idea that the product section of the grocery store is a good place to base our business. Returns on fruits, vegetables and nuts have been growing at a stronger pace than other areas of the food sector, and we believe that trend will continue.” David Gladstone – CEO, Gladstone Land Corporation – owning 24,000 acres of farmland    “One of our primary goals is to align ourselves with top-quality operators in various parts of the United States in an effort to build a diverse portfolio of agricultural assets across the spectrum of crops.” Farmland Partners –…

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Chinese Keep Trying to Buy World’s Largest Ranch

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Touch the Soil News #367 Australia’s largest farm/ranch (and possibly the world’s largest) is the S. Kidman and Co. enterprise. Chinese interests have been trying to buy it for some time. The last effort was turned down last year by the Australian Foreign Investment Review Board. Reasons include that it was not sufficiently in Australia’s best interests to sell to Chinese interests. Within the last week, however, another Chinese company – Dakang Australia – has entered the competition to buy the large S Kidman and Co. land. Dakang Austrailia is owned by Chinese interests, the largest of which is the Shanghai Pengxin Group. To soften the situation, Dakang Australia has…

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Are Your Insurance Premiums Buying Farms from Farmers?

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Touch the Soil News #351 A landless farmer farms land owned by someone else. When you pay your insurance premiums, insurance companies build-up huge cash reserves that they invest. Some of those monies are now funneling to investors who want to own farmland. MetLife has been one insurance company (along with John Hancock) that has specialized in lending money to farmers to buy and own farmland. Farmers in the past often had debts on their balance sheets to MetLife for a farm mortgage loan. MetLife is a publically owned company that has stockholders and its stock is traded on the New York Stock Exchange as MET. MetLife has total assets…

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Overcapitalization of Capitalism – Takes Over Farms

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Touch the Soil News #327 You are probably wondering what overcapitalization of capitalism is. Simply, it means there are more investment dollars out there then there are investment opportunities. This situation has been fostered in part by the build-up of retirement plans by workers over the last 50 years. The Investment Company Institute recently reported that retirement assets in the U.S. were valued at $23.5 trillion. The total numbers of U.S. dollars looking for an investment are in excess of $84 trillion. But it is not just folks socking away for retirement that are giving Wall Street Interests trillions of dollars to go hunting for a return. There are other…

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