A recent Reuters article posted on forexpros.com backs up a growing trend that we have been seeing the last few years here in the Midwest. That is, pension funds becoming more active in purchasing farmland. The article (Pension Funds To Bulk Up Farmland Investments) takes a closer look at why pension funds are taking a harder look at farmland as an alternative to their traditional holdings. With the volatility that the stock market has seen in the last few years, investors are viewing farmland as a sound investment to diversify their portfolio with steady long-term growth and a hedge against future inflation. The author also mentions that, unlike in the past, many pension funds are purchasing farmland parcels on their own and not part of groups and that the fund managers are staying much more active in the management of the farmland.
One of the biggest challenges for these types of buyers is satisfying all of their requirements. It is rare to find large amounts of available contiguous farmland, or even available farmland in the same local region. Even if a property is identified that would work from a dollars/acreage standpoint, it still must fit the fund’s return requirements.
What have you seen in your area with large institutional land buyers? Have they made any purchases in the last few years? Is this a trend that you see continuing into the future as companies continue to look for ways to diversify their holdings?