KC Sheperd, Farm Director is visiting with the Chairman and CEO of Farmland Partners, Paul Pittman, talking about how investing in farmland means investing in rural America and the people who fuel the world.
“Farmland Partners is a real estate investment trust,” Pittman said. “We are traded on the New York Stock Exchange. We own about 160,000 acres spread across the country in about 20 different states and we rent that land to local farmers who operate the land for us.”
Farmland values are very strong, Pittman said, and that is driven by the fact that it is a good long-term investment but also reasonably high commodity prices for the last couple of years. Farmer profitability is up, he added, which helps those high farmland values.
“The big driver of farmland values is farmers themselves,” Pittman said. “Most of the transactions are done by farmers, and they are frankly the ones paying top-dollar. We as an investor are frankly not in the market very much right now because we think prices have gotten very strong, so we tend not to be acquiring as much as we used to.”
For 2023, Pittman sees prices holding where they are.
“I doubt they continue to go up as aggressively as they did in 2020 and 2021 and 2022, but I don’t think they are going to come down very much,” Pittman said. “It is a very good and valuable asset, it is obviously won a very strong inflation environment, and farmland values are always going to go up when inflation is high.”
Farmland is largely being lost to development of some sort, Pittman said, whether that is solar development, wind development or regular urban development of real estate.
“I don’t think that trend is going to change,” Pittman said. “It is frankly an ever-growing population, and the cities are growing, and they are going to take more and more land as that happens.”
On the Farmland Partners website, Pittman said visitors can see photos and maps of most of the assets they own and read about the company’s financial characteristics.
