Industry Focus

The U.S. is the world’s largest supplier of corn, shipping more than the next three largest exporters combined. Worldwide consumption of the product has increased more than 50% over the past 15 years due to a growing population and alternative energy mandates. The U.S. is also the world’s largest soybean provider and has seen its exports of the crop grow more than 80% over the last 15 years.

Midwestern farmland prices have seen the largest price increases in more than 30 years, including annual gains as high as 28%, with corn and soybean prices nearly quadrupling since 2001. Despite impressive gains, we hold that the fundamentals still reside for continued growth.  Rising global demand is being placed on a finite resource – land. Furthermore, farmland acquisitions are primarily unleveraged, as cash buyers turn to land as a safe haven.

From a global perspective, tightening supplies raise concerns over crop producers’ ability to meet the surge in demand for agricultural commodities, despite modern improvements in genetics and agronomic practices. Only 10.57% of the earth’s surface is arable land and each year 30 million acres are lost to desertification where 20 million tons of grain might have been grown.