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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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Is Demand for Food Creating a Financial Frenzy over Farmland?

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Touch the Soil News #484 (feature photo cc-by-sa-2.0) In 2008, while the focus was on the unfolding real estate crisis, another crisis was simultaneously unfolding. Through price shocks on basic grains, about 100 million people (bringing the total to over 900 million) were relegated to the ranks of the hungry almost overnight. Today, with the multitude of global trade agreements in place, one thing about the future cost of food is certain – food will go to the highest bidder in the world. There were shortages of wheat in 2008 in the U.S., as higher international bidders cleaned out the nation’s stocks. The volume of investor dollars looking for farmland,…

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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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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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The Emerging Food Domino Effect

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Touch the Soil News #276 Emerging in the global food landscape is what could well be called the domino effect. In past decades, the effect of one nation’s struggle for food did not necessarily domino over to other nations. Most nations tried to be somewhat food self-sufficient. Many nations had subsidy programs to support and encourage their national foods and farmers. However, no nation ever considered balancing its population with its ability to feed itself. Then came the World Trade Organization (WTO). To join the WTO, nations had to eliminate subsidies in order for farmers across the oceans to be able to compete with farmers of someone’s homeland. The world’s…

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Farmland Partners – It’s Hard to Lose Money on Farmland

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Touch the Soil News #245 Almost unbelievable just 10 years ago, a new kind of farmer has emerged the likes of which have never existed in human history. This new farmer takes the form of a consortium of agricultural-savvy professionals who farm not with tractors, but with dollars. One example is Farmland Partners, Inc. – a publically traded (New York Stock Exchange) company. Farmland partners buys farms and often leases them back to the farmer they bought it from. With their dollars, their way of farming is an armchair approach that oversees what goes on with their farmland. A relatively new company, Farmland Partners, Inc. had some 7,000 acres they…

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