August 16, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

I see a theme emerging. Gladstone Land has announced it has closed on a $42.3 million deal for farmland, blueberry plantings, and improvements situated in Kern County, California, and Yamhill County, Oregon.

Both farms are 100 percent certified USDA organic, and both feature high-density plantings, shade structures to minimize inputs and to ensure the quality of the fruit, and both have advanced irrigation systems in place. 

As per the framework of the deal, Gladstone has entered into triple-net leaseback agreements ranging between 10 to 15 years with the seller of each farm.

“These two acquisitions are ideal properties for our growing portfolio of farms producing healthy produce,” said David Gladstone, president and CEO, Gladstone Land. “We are continuing to target the highest quality farms with secure sources of water. But our greatest strength is that the growers we partner with are dedicated to cultivating the best produce and preserving resources.”

Gettin’ The Blues

This deal marks the fourth blueberry, or blueberry adjacent deal, for Gladstone so far this year.

In the early days of January the company announced two deals – one that included 1,390 acres planted in organic and conventional blueberries and a fresh packing and cool facility. 

In mid-March the company went on to announce its acquisition of 108,000 square-feet of cold storage and supporting facilities in Stockton, California, to primarily be used to cool and store fresh organic and conventional blueberries, for which the company entered into a 10-year lease agreement with the seller.

And more recently, in June, Gladstone expanded its Mid-Atlantic holdings, announcing its acquisition of 116 gross acres of farmland, including 100 acres of blueberry bushes along with a fresh packing and shipping facility in Hammonton, New Jersey, for approximately $2.2 million. 

Taken as a whole, it is clear Gladstone is positioning to capitalize upon some strong macros. Organic production and organic produce have become key concerns for consumers. Organic produce sales in the U.S. increased by 14.2 percent in 2020, equalling an increase of $1 billion to sales topping $8.5 billion, according to the 2020 Organic Produce Performance Report.

And looking ahead, the global organic food market is expected to grow at a CAGR of 12.6 percent to reach a value of more than $23.5 billion by 2025, according to 360 Research Reports. 

Broken down, berries (strawberries, blueberries, and raspberries) were counted in the highest categories for growth at 12.2 percent, following only packaged salads, which saw growth of 15.4 percent, potatoes at 21 percent, and herbs and spices at 26 percent.

COVID-19 was a driver for this uptick in demand, pushing growth rates well beyond the average 10 percent posted between 2010 and 2016, and giving a fresh kickstart to sales that have moderated in the face of increased consumer saturation.

This latest deal not only adds high-value permanent crop acreage to Gladstone’s portfolio, but brings additional value – through the value attached to organic farmland as a real asset, higher premiums for the organic crops harvested, and as a sizable regenerative carbon sink.

Gladstone’s portfolio now stands at 155 farms totaling 106,000 acres across 14 different U.S. states. With these holdings is also 20,000 acre-feet of banked water in California, valued at approximately $1.3 billion

Joseph Van Wingerden, director, Gladstone Land, also noted the double digit growth experienced by organic produce last year, adding, “The innovative growing methods used by our tenant on these properties represent how the best farmers are continually striving to meet this demand with the highest quality produce while being good stewards of the land and minimizing water use.”

– 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.