If you or someone you know is considering selling farmland, please read this carefully!
Grain farmers looking for a way to unlock the equity built up in their farming operations need not sell out, borrow or rent their farms, nor do they have to lose possession of their farm to gain access to that equity.
I wanted to take a moment to introduce myself. My name is Todd Dyer, I am president of the Farmland Marketing Group.
I grew up in Wisconsin, where my mother's side of the family were dairy farmers going back 100 years. My father spent his career at Transamerica Life Insurance Company, a Company that has invested hundreds of millions of dollars in farmland. My family has also owned farmland as an investment for decades.
Over the last several years I have been hard at work assisting Nicholas C. Hindman, Sr. (see http://www.agnewscenter.com/trk/process.cfm?track=3363&tc=2&codex=123095) and his team in putting together a farmer owned, farmer controlled Fund that would give farmers the liquidity they need and want without them having to give up their farms.
As you are undoubtedly aware, countless Agricultural Real Estate Investment Funds already manage billions of dollars of farmland.
Additionally, new funds are being started, structured and restructured by foreign governments, hedge funds, insurance companies, and others, all looking to make acquisitions of farmland.
All of these would be purchasers operate with a simple business model..."buy farmland and rent it back to farmers."
At the same time a generation of farmers are approaching retirement age, the average age being 55 years with over 40 percent over the age of 65. (see http://www.agnewscenter.com/trk/process.cfm?track=3364&tc=2&codex=123095)
Over the next several decades there will be significant pressure on farmers to sell. Whether it be forced sales to satisfy estate taxes or estate settlement issues (already the number one factor driving farmland sales), or simply farmers wanting to retire and/or not having children that want to carry on the family tradition.
Regardless of the reason, these forthcoming farmland sales create the strong possibility that control of production could shift away from independent family farmers and America’s heartland could very well end up in the hands of foreign governments, insurance companies and big agricultural real estate investment funds.
For anyone considering selling their farm, Mr. Hindman’s new Funds create an alternative not previously available to farmers.
Farmers who become part of American Farmland Partners can get the liquidity they need without having to give up their farms and without giving up the future income or appreciation generated by their farms. Farmers also have the ability to continue occupying and operating their farms and can pass that right on to their heirs.
As you may also know, seed companies, grain companies, retail grocery chains and other businesses that use farm commodities have merged and consolidated, increasing their market share and eliminated their competition.
This has resulted in these businesses becoming more powerful and profitable.
They have accomplished this, in part, by exerting price pressures on farmers and the commodities they produce.
Many farmers end up being squeezed from both sides, paying a high price for inputs like seed and fertilizer and not being paid a fair price for the commodities they produce or, in the alternative, having to deal with a great deal of volatility.