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johnaa
Advisor

Half of U.S. Farmland Being Eyed by Private Equity

http://warincontext.org/2014/02/22/half-of-u-s-farmland-being-eyed-by-private-equity/                     

 

http://www.ipsnews.net/2014/02/half-u-s-farmland-eyed-private-equity/ 

 

snip--  Mirroring a trend being experienced across the globe, this strengthening focus on agriculture-related investment by the private sector is already leading to a spike in U.S. farmland prices. Coupled with relatively weak federal policies, these rising prices are barring many young farmers from continuing or starting up small-scale agricultural operations of their own.

In the long term, critics say, this dynamic could speed up the already fast-consolidating U.S. food industry, with broad ramifications for both human and environmental health.

snip--In a new report released Tuesday, the Oakland Institute tracks rising interest from some of the financial industry’s largest players. Citing information from Freedom of Information Act requests, the group says this includes bank subsidiaries (the Swiss UBS Agrivest), pension funds (the U.S. TIAA-CREF) and other private equity interests (such as HAIG, a subsidiary of Canada’s largest insurance group).

snip--While federal agriculture officials are expected to offer updated demographic information within the coming week, the most recent statistics suggest that just 6 percent of farmers are under 35 of age. Further, some 70 percent of U.S. farmland is owned by people 65 years or older.

    “The older generation needs to cash out because they have no retirement funds, even as the new generation doesn’t have the capital to get into the kind of debt that [starting a farm] requires,” Severine von Tscharner Fleming, a farmer and co-founder of the Agrarian Trust, a group that helps new farmers access land, told IPS.

1 Reply
BA Deere
Honored Advisor

Re: Half of U.S. Farmland Being Eyed by Private Equity

Farming and Ranching has always been dominated by old men, promising to retire "next year" with a dozen young men licking their chops for the opportunity.  And now isn`t any different, but there`s no question you can make a small fortune, if you first start out with a large one  Smiley Happy

 

Everything costs more and the risks are higher in farming today.  My fear is that if we have a "bust cycle" that would present a golden opportunity for a corporation to buy up land pennies on the dollar.  like the hog business was taken over by the corporations. In my area 20 years ago, I sold hogs to 5 different buyers and each buyer probably had 300 farmer customers.  Today there really aren`t any farrow to finish hog farmers left...that feed their own corn, grind their own feed for their own hogs from birth to market, I`m one but it`s mighty lonely.  All it takes is one extended bust cycle in grain prices/interest rates and crop farming will go the same way.