How to Buy In to Agribusiness

By Steve Dinnen

You want to own a farm. You maybe can’t swing the $2.13 million that it took to acquire a quarter section of prime cropland in Cass County. Plus, you worry about the liquidity of such an investment.

Fear not. For just $19.33, you can own a piece of the agribusiness pie. That’s the price of one share of Gladstone Land Corp., a publicly traded company that operates 127 farms spread across 13 states. Call your broker—hopefully being more serious than $19.33—and you have immediate ownership of a sliver of 94,000 acres of Gladstone farmland. Farmland Partners Inc. of Denver is another public farm operator. Both Farmland and Gladstone are structured as real estate investment trusts (REITs), so by law they pay 90% of their taxable income to investors each year. Current yield on Farmland (FPI: $10.70-$16.39-$13.93) is 1.48%, and at Gladstone (LAND: $19.45-$42.10-$19.33) it’s 2.96%.

LLC ownership arrangements are more common and include several in Iowa. Among them are Grainfield of Nevada (an arm of Hertz Farm Management) and Peoples Co. of Clive. Summit Agricultural Group of Alden, led by well-known agribusines leader Bruce Rastetter, has opportunities in both row crops and livestock.
Accredited investors also can link to AcreTrader, of Fayetteville, Arkansas. It has buy-ins to LLCs that operate farms for timber in Alabama, rice in Arkansas, and peanuts in Georgia.

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