Delta land purchases by investment funds

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An example of investment fund purchases of farmland recently occurred with LandFund Partners LP buying 2,500 acres in Mississippi and Arkansas. Reportedly LandFund will rent the land to tenant farmers, which is how the land was farmed for previous owners.

LandFund is a Nashville, Tenn., limited partnership closed-end private equity fund that raised at least $7 million for this farmland purchases and continues to look for additional farmland to purchase across the nation.

The Tennessean newspaper in its online version investigated how the LandFund is focusing on agricultural land because of its management. John R Farris, the president of Commonwealth Economics, a financial advisory and consulting firm with offices in Nashville and Lexington, Ky., is LandFund’s senior manager. Nashville businessman David Griffin, a life-long farmland owner, is also a manager of the fund along with farm manager Billy Ussery and agriculture lawyer Robert Serio of Arkansas.

The company is actively looking for more farmland opportunities nationally although management suggested that valuations are attractive in the Delta or Mid-South, reporter Getahn Ward wrote.

 “Delta farmland is very attractive when you compare valuations,” Getahn quoted Griffin as saying. “If you look at acreage costs and yields per acre in the Midwest, and compare those prices to acreage costs and yields per acre in the Delta, you will find that row crop farmland in the Delta states offers you much more value for your dollar.”

The company suggested return on its farmland investments can return 4 percent to 5 percent yield, which compares to U.S. government bonds of 2 percent to 3 percent.

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