February 16, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

With a focus on high-value and permanent crops, Farmland LP is the largest asset manager focused on converting conventional farmland to sustainable organic production in the U.S. – a strategy which is striking home for many investors as ESG and regenerative factors continue to play ever-increasing roles in capital commitment decisions. 

At Global AgInvesting 2021, Craig Wichner, CEO of Farmland LP, 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 huge potential was reflected in the record-setting year that Farmland LP had in 2022, when the firm posted record revenue and AUM, expanded organic production, and hired staff for its farms and fund management teams. 

Continuing the momentum, Farmland entered into an agreement to acquire Riverwood Farm, an 1,184-acre property in Oregon’s Willamette Valley – one of the prime agricultural production regions of the Western U.S. – for an undisclosed sum. 

Farmland noted that this acquisition will boost its production of high-value crops with strong market demand – notably, wine grapes, organic blueberries, and hazelnuts. 

And once completed, will bring the firm’s owned and managed acreage in Oregon to approximately 5,000 acres, and its total acreage in Washington, Oregon, and California to over 16,000 acres with more than $200 million in AUM across two funds. 

“As a high-quality operating farm with current cash flow and compelling value-add opportunities, Riverwood fits into our portfolio very well,” said Wichner.

“Its location in close proximity to our existing Oregon farm portfolio and farm-management headquarters also provides excellent economies of scale. The addition of Riverwood Farm will allow us to increase our organic and regeneratively farmed footprint to meet consumer demand while providing excellent returns for our investors.”

Vital Farmland REIT

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.

It was in March 2022 when Farmland announced the close of its second fund, Vital Farmland REIT LLC at more than $130 million in equity capital from family offices, institutional and accredited investors, and clients of numerous Registered Investment Advisors. 

Commenting at the time 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. 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.”

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.

Indeed, on the back of such success, and expectations that investor demand will remain robust, Farmland shared its plans for 2023 – to launch a new Fund III with a strong pipeline of potential acquisitions. 

~ Lynda Kiernan-Stone is editor in chief 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 Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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