March 30, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Farmland LP is the largest asset manager focused on converting conventional farmland to sustainable organic production in the U.S. – a strategy in which investors are certainly demonstrating their confidence. And the potential is huge – while speaking at Global AgInvesting On The Green 2021 Craig Wichner, CEO of Farmland LP, said that his company estimated that there was about $80 billion worth of farmland that could be converted to organic just to serve the existing domestic market demand for organic products.

While speaking at Global AgInvesting On The Green 2021, Wichner said, “There is much potential in organic farmland, with only 1 percent of U.S. farmland currently designated as certified organic. About 6 percent of the U.S. food budget is spent on organic food, or about $56.5 billion, which, according to the Organic Trade Association, would be much larger if not constrained by supply.”

This potential is being reflected in Farmland LP’s latest announcement that it is closing its second fund, Vital Farmland REIT LLC, at more than $130 million in equity capital from family offices, institutional and accredited individual investors, and clients of numerous Registered Investment Advisors. 

Vital Farmland REIT is Farmland LP’s second fund since its inception in 2009, and the firm stated that it will use the capital raised to continue to invest in high value-added projects on its farms located in Oregon and Washington.

Commenting on the successful close of Vital Farmland REIT, Wichner said, “Farmland values in the U.S. reached record levels last year, and demand for organic produce continues to rise,” said Wichner. “With these favorable dynamics, investor interest in organic and regenerative farming is increasing, as demonstrated by the strong response to our second fund.”

“In today’s investment climate, with rising inflation and volatility in equity markets, U.S. farmland offers investors consistent, stable and non-correlated returns,” he continued. “And our value-add approach to actively managing the farmland in our funds is a compelling strategy for returns versus the broader farmland sector.”

With a focus on high-value and permanent crops, Farmland LP is the largest asset manager in the U.S. converting conventional farming operations to sustainably-run organic farms using regenerative production practices.

Currently, the firm owns and/or manages more than 15,000 acres of high-quality farmland in Washington, Oregon, and California with approximately $200 million in assets under management across its two funds. 

Using technology to drive productivity gains, Farmland’s funds are designed to generate competitive, risk-adjusted returns to investors while also demonstrating – and quantifying – the positive benefits of regenerative farming on human health, ecosystems, biodiversity, water resources, and climate change.

“Many investors in our new fund have an ESG orientation,” said Wichner, “and they actively seek investments with demonstrable benefits for people and the planet. Our regenerative farming practices and adherence to Certified Organic standards give investors the assurance that their capital is having a real impact rather than greenwashing the most environmentally destructive practices in agriculture.”

The successful closing of its second fund rounds out a string of impressive accomplishments for Farmland LP. In 2020 the asset manager earned the highest corporate sustainability rating awarded by HIP Investor Inc. – a top ESG and sustainability ratings firm. And in April 2021, the firm was featured as a top pic in the real asset category of the Fortune Q2/2021 Investment Guide.

“Our value-add approach to actively managing the farmland in our funds is expected to generate returns to investors in excess of those available in the broader farmland sector,” said Wichner. “Additionally, our regenerative farming practices and focus on converting conventional farmland to organic offer investors the tangible ESG benefits they are seeking, but seldom finding, in their fund managers today.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com. 

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