Chief executive Paul Pittman of Farmland Partners says his company’s purchase last week of 120 farms in Illinois with a combined 22,300 acres is part of an expansion drive. “We think we can keep growing very substantially and target doubling in acreage and value every year,” Pittman told DTN. Farmland Partners, a real estate investment trust, now has nearly 100,000 acres in its portfolio, compared to 7,500 acres in April 2014.
Farmland Partners doesn’t intend buy land and sell it for a quick profit, Pittman told DTN’s Marcia Taylor, preferring patience and multi-decade horizons common to insurance companies and other investors looking for long-term assets. “Perhaps the most serious threat for Farmland Partners is the risk that agriculture’s cash rents could falter from their normal 4 percent to 6 percent annual returns – or that overall farm real estate values collapse with farm incomes. Pittman scoffs at both scenarios,” says DTN. Pittman says high yields offset the impact of lower commodity prices, so land rental rates will remain strong.