A Good Time To Buy Farmland? This Investor Thinks So

A Good Time To Buy Farmland? This Investor Thinks So

Tim Hammerich
Tim Hammerich
News Reporter
This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

With increased interest rates and inflation, some potential buyers of farmland have decided to move the sidelines. On the other hand, Craig Wichner, founder of Farmland LP, believes right now is actually a great time to buy, and he explains why.

Wichner... "There's 3. 8 trillion, actually it's now like 4. 3 trillion worth of farmland in the U. S. Only 2 percent is institutionally owned, and there's only about 13 percent debt on the entire farmland sector. What that means is that most farmland is unleveraged, and that makes it a very stable, very wonderful asset class. But you have a certain percentage of farmland that is leveraged, and that tends to be leveraged 50 to 60%. And those are mostly the institutional investors, who have invested in high quality, high-value crops and the ones that didn't prepare or that may be near kind of the end of their life cycle and are now being fully exposed to interest rates that have doubled are often being squeezed now, and they're basically at the point where they have to sell their assets. And so we're seeing a lot of high-quality institutional caliber properties that are on the market and at the same time, those same trends actually keep those other institutional investors kind of on the sidelines."

Wichner says this is the best pipeline he’s had for high-quality farmland in 15 years.

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