Farmland LP provides investors with the opportunity to invest in two dynamic markets: farmland and organic food.
Owning farmland has been a successful investment strategy across economic cycles, delivering non-correlated, inflation-hedged returns with cash flow and long-term appreciation. It is anticipated that between $240 billion and $1 trillion of farmland will change hands in the coming decade due to the aging of the American farmer. The $2.5T U.S. market is only 1% institutionally owned and remains highly inefficient.
The U.S. organic market is experiencing double-digit growth annually, constrained only by the shortage of certified organic farmland. With over 84% of American consumers purchasing organic, their popularity has expanded beyond natural food retailers such as Whole Foods, to conventional outlets such as Walmart, Target and Costco (now the largest retailer of organics). Due to the current supply/demand imbalance, organics command price premiums that range on average from 50-200% over their conventional counterparts. Given these market trends, we believe using sustainable farm management to convert commodity farmland to certified organic farmland offers investors an opportunity to achieve favorable long-term results.
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