By Sara Wensley, Head of Marketing at FarmTogether
Evaluating a farmland investment requires more than analyzing acreage, historical yields, crop prices, and projected returns. Those inputs are important, but they only provide part of the picture. Understanding the quality and long-term potential of an agricultural asset also requires knowing what to look for on the ground—and how agronomic and operational conditions ultimately connect back to investment performance.
Some of the most informative characteristics of a farm may not be immediately apparent in a financial model. Tree and vine structure can provide insight into crop health. Soil conditions can reveal how effectively water moves through the root zone. Irrigation testing can show whether water and nutrients are being distributed consistently across an orchard. Even during the off-season, field conditions can provide valuable information about how a property has historically been managed and how well positioned it may be for future production.
Drawing on insights from Gretchen Montague, Head of Farm Management at FarmTogether, we explore some of the field-level factors experienced farmland managers evaluate, how those observations can be validated through testing and diligence, and why understanding what is happening on the ground can provide investors with a more complete view of an agricultural asset.
Reading a Farm Beyond the Current Crop
Q: When you’re evaluating a farm, what are you looking for beyond the obvious things an investor might notice?
Gretchen Montague: There is a lot we can learn from knowing where and how to look. Even when an orchard is dormant or there isn’t fruit on the trees, we can evaluate the structure and condition of the planting. Depending on the crop, we may look at canopy development, fruiting wood, leaf health, weed management, irrigation practices, and overall field uniformity. We’re also looking for indicators such as salt toxicity or disease that can tell us more about crop health and how the property has historically been managed.
No single observation necessarily gives you the answer. It’s the combination of those indicators that creates a more complete picture of the asset. Looking at the physical condition of the planting alongside soil, water, infrastructure, and management practices helps us understand whether those pieces are working together as expected.
That is particularly important during due diligence because we’re not relying exclusively on historical production or information provided to us about the property. Our farm management team and prospective operator typically walk the farm before acquisition, supplemented by third-party surveys, inspections, soil sampling, and other testing where appropriate. The objective is to independently validate the assumptions behind our underwriting and develop a detailed understanding of the asset before we invest.
Understanding How Water Moves Through the Farm
Q: Water is obviously important to agriculture. Once you’ve established that a property has access to water, what else do you evaluate?
Gretchen Montague: Water availability is only one part of the analysis. We also want to understand how effectively that water can be delivered throughout the property and how the soil responds once it gets there. An irrigation system may be operational, but that doesn’t necessarily mean every part of the orchard is receiving water consistently.
One tool we use is distribution uniformity testing, which evaluates how evenly an irrigation system applies water across the property. This matters not only for irrigation efficiency, but also for crop nutrition because fertilizers are frequently delivered through the irrigation system. If water is not distributed uniformly, nutrients may not be either, potentially contributing to differences in tree development and crop performance.
We also evaluate soil moisture and infiltration. Soil structure influences how water moves into and through the root zone, which is why we consider the relationship between water, soil, and the crop rather than treating each as a separate factor.
Looking Beyond Yield
Q: Investors tend to focus on yield when thinking about farm performance. What else does your team consider?
Gretchen Montague: Yield is certainly important, but we want to understand more than how many pounds or tons a property produces. We also evaluate the quality and marketability of that production and the agronomic factors contributing to the result.
Crop performance reflects an interaction between nutrients, water, canopy development, weed competition, pest pressure, and weather throughout the growing season. Timing matters as well. Conditions during flowering or fruit set, for example, can influence how the crop develops later in the season.
That’s one reason we monitor phenological activity during property inspections. Rather than evaluating an orchard based on a single snapshot, we’re looking at how the crop is progressing through its development and whether that progression is consistent with what we would expect for that crop, region, and point in the season.
Quality can also have a direct relationship with economics. Depending on the crop, differences in size, appearance, or other characteristics can influence how the product is graded and marketed. Understanding those relationships helps us look beyond headline yield figures to develop a more complete view of the operation.
Evaluating the Systems Behind the Crop
Q: How much of your assessment is focused on infrastructure rather than the trees or crops themselves?
Gretchen Montague: Quite a bit, because a farm’s productive capacity depends on the systems supporting it. Beyond irrigation infrastructure, we’re evaluating whether the property has the systems appropriate for its particular crop and growing region.
Weather protection is one example. In colder growing regions, management practices can include insulating vulnerable parts of trees against extreme winter temperatures. At certain California properties, meanwhile, infrastructure such as wind machines and overhead water systems can provide frost protection when conditions require it.
Those systems may not be used every year, but part of our job is to anticipate the conditions a property could encounter and determine whether the appropriate infrastructure and management practices are in place. We want to evaluate those considerations proactively rather than begin thinking about them only when they’re needed.
Connecting What We See in the Field Back to the Investment
Q: How does all of this field-level information ultimately influence investment decisions?
Gretchen Montague: The agronomic and investment sides of the business are closely connected. During due diligence, our farm management team’s observations help validate the assumptions used by the investment team. Once we own the property, that same expertise helps us assess how the farm is performing relative to those expectations.
If we observe something changing in the field, we want to understand what it means for the operating plan. If an expense differs from the budget, we want to understand the agronomic decision behind it. And if we’re considering an infrastructure improvement or change in management practices, we evaluate both what it could mean for the farm and how it fits within the broader investment strategy.
This is why our team remains actively involved after acquisition. We conduct recurring property inspections, maintain regular communication with operators, review operating expenses, and monitor conditions throughout the growing season. Underwriting establishes what we believe an asset can do based on the information available at acquisition; active management allows us to continually evaluate those assumptions against what we’re observing on the farm.
What Investors Don’t See From the Numbers Alone
A farmland investment can look relatively straightforward from a distance: acquire agricultural land, grow a crop, sell that crop, and participate in the potential income and appreciation generated by the asset. In practice, professionally evaluating and managing farmland requires expertise across agronomy, soils, water, crop development, infrastructure, agricultural markets, financial management, and regional operating conditions.
Many of the factors that help determine the quality of an agricultural asset will never appear in a traditional property listing or financial model. Yet they can provide important insight into how a property has been managed, the conditions supporting its production, and what may be required to maintain or improve its long-term productive capacity.
For investors, this is why evaluating farmland should extend beyond historical yields and projected returns. The numbers remain critical, but understanding the agronomic and operational conditions behind them can provide a more complete picture of an asset’s potential opportunities and risks.
Ultimately, some of the most important insights about a farmland investment are found not in the financial model, but in the field.
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