Wall Street investment firms are once again putting money into farmland. Institutional investors are buying up farmland as farmers, who would normally be competing for the land, are hanging on to their cash.
This investment money can mean different things for local ag communities. Some institutions will purchase land and lease it back to a farmer, who can then continue to operate. Brian Wise, the Director of Acquisitions for U.S. Agriculture of Indiana, says deals like that are standard practice for his company. This is good news for agribusinesses in the area as the farmer’s business relationships with those retailers can stay intact. However, if a farmer’s financial records and position are less than solid, firms often choose to rent to another producer. Investment firms have been known to make very large purchases of land.
Denver-based Farmland Partners, Inc., bought more than 8,600 acres of land in Illinois at a cost of $55.3 million. However, firms own less than one percent of the $2.5 trillion land market in the U.S. Farmers or their families own or control 61 percent of the 91 million acres in U.S. farms.