Land Commodities

Investment returns – Introduction

Farming is like any other business: all other things being equal, income is dictated by the quality of the management team. Even enterprises with similar soil, climate and business model can show a high degree of variance. This means tenant / manager selection is a critical component of the agricultural investment process.

In order to optimise returns for our clients we thoroughly assess the background and historical performance of tenant farmers and operational managers against regional and sector based benchmarks. This will include an assessment of yield performance, soil management track record and other indicators of agricultural management capability.

Although land values are driven to a large extent by external factors such as economic and climate conditions, there are means by which agricultural investors can beat the averages. Buying at the right price is obviously critical. Land Commodities usually purchases farms on a subject to valuation basis and we pride ourselves on our ability to make below valuation acquisitions on behalf of our clients. We achieve this by taking a contrarian approach to selecting properties and identifying motivated sellers. (Click here for more information on our approach to buying farms.)