May 11, 2020

By Lynda Kiernan

Real estate investment trust (REIT) Gladstone Land announced it has closed on a $3.5 million irrigated farmland deal in Chase County, Nebraska. The 648-acre, mixed-crop operation currently grows a rotation of potatoes, edible beans, and corn with good access to water via on-site wells. 

“About half of the acreage on this farm will be planted in potatoes, a crop that is currently in extremely high demand,” said David Gladstone, president and CEO, Gladstone Land. “In addition, these potatoes will be shipped directly to a nearby processing facility owned by the same tenant. We believe in teaming up with the strongest growers in any given region, and we believe this tenant fits that profile for us.”

Indeed, Nebraska’s soil is highly-suited to potato production, and the crop has seen significant growth in the state in recent years. In 2017, the state planted 19,000 acres of potatoes, up 15 percent year-on-year from 2016. That same year Nebraska harvested 9.03 million cwt – an increase of 22 percent over the prior season. Since then, demand has continued to climb, (largely on higher demand for french fries), and COVID-19 has only intensified demand, as consumers are stocking up on foods that store well, resulting in retail prices for bags of fresh potatoes to nearly double.

Encore

This is the second acquisition for Gladstone within a matter of months for a mixed-crop operation growing potatoes and corn, following a January acquisition of  a 1,324-acre farm, of which 1,064 acres are irrigated in Holyoke, Colorado.

As is customary for Gladstone, as part of the Chase County acquisition, Gladstone entered into a seven-year, triple-net lease with a local tenant who will process the potatoes grown on-site at one of their own facilities.

“We believe in teaming up with the strongest growers in any given region, and we believe this tenant fits that profile for us,” said Gladstone. “We look forward to continuing to add more farms to our already-existing portfolio of farmland primarily growing fresh fruits and vegetables.”

This Chase County deal is also a return to Nebraska for Gladstone, which expanded into the state in October 2019 with the acquisition of 3,850 acres of farmland across two farms in Hayes and Hitchcock counties for $14.7 million. 

Both farms also grow corn, soybeans, and edible beans, however, one aspect setting this deal apart from Gladstone’s previous transactions, is that the company is assisting their tenant farmer in transitioning both farms to organic grain production by 2021.

“In addition to the 17 new irrigated circles, we will be constructing a state-of-the-art grain drying and storage facility to safely handle and protect the integrity of the organic grain on the farms,”said Bill Hughes, managing director, Gladstone Land, in October 2019. “The Company is making a concerted effort to acquire or develop more organic crops within its farmland holdings, and it believes these acquisitions demonstrate its commitment to farms growing healthy foods.”

This most recent deal in Nebraska brings Gladstone’s portfolio to 114 farms totaling approximately 89,000 acres across 10 U.S. states, carrying a value of $895 million. Over the years Gladstone has diversified its portfolio to include fresh produce annual row crops, such as berries and vegetables; and permanent crops such as almonds, apples, figs, olives, pistachios, as well as vineyards, and blueberry groves.

“We continue to add farms in this area due to the good water, crop diversity, and the ability to find quality tenants” said Hughes. “We are especially excited when we can find tenants that are willing to grow a quality, non-GMO product that consumers can feel good about.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.