Chess Ag Full Harvest Partners, Full Harvest Agricultural Opportunities, Agricultural Opportunities Fund, Shonda Warner, Shonda Warner Chess Ag, Shonda Warner Mississippi


Chess Ag Full Harvest Partners, advises and manages the Full Harvest Agricultural Opportunities series of funds. The Chess Ag team is dedicated to a belief there will be many opportunities in row crop agriculture in North America over the next ten to twenty years. This would be due to a combination of a rapidly growing global middle class with changing dietary demands, a medium term continued use of bio-fuels that rely on row crops as input and small farm culture within North American that will be subject to pressure from economies of scale provided by very efficient technology and equipment.

Chess Ag believes in meeting the goals of our investors by marrying the need for intermediation of capital in the North American agricultural industry, to the desire for uncorrelated, low volatility investment return streams. Agriculture provides an added benefit of being positively correlated with inflation as well.

Diversification Benefits
    • Going back to the 1880s the value of farmland has a 90-95% correlation with inflation 
      • source: Kastens and Dhuyvetter, KSU
    • Farmland is negatively correlated with REITS in down markets (1970-2004)
    • Farmland is negatively correlated with stocks and bonds in down markets
Market demographics are changing
    • Unique opportunity to acquire settled and retiring farmers' land in the next 10 years.
Few institutional players are involved at this stage
    • Can you name anyone with agriculture in their portfolio?
Attractive risk adjusted rates of return
Secure stable asset using modest leverage on an industry wide basis
    • Annual USDA growth rates on land value component
      • 1880 to 2007, rate of return = 4%
      • 1951 to 2007, rate of return = 5%
    • Current cash rental yields range from 3% to 6%
      • Current yields are a function of...
        • Level of interest rates
        • State (Illinois, Indiana, Nebraska, Kansas, etc.)
        • Type of crops that can be produced on the land
        • Irrigation availability
Potential for U.S. Agriculture to Change: The Full Harvest team has a strong belief that the difficult and static structure of agriculture we have experienced in the United States for the past thirty years is beginning to change.  This change will be under pinned by U.S. desire to move away from traditional petroleum based energy sources, and also by changing patterns of food consumption around the world.

Agriculture/Biofuel Synergies: Although $40 oil makes ethanol less attractive, Full Harvest believes that bipartisan support for alternative fuels and en eventual inflationary spike still makes a strong case for biofuels.  There are huge synergies between the biofuel industry and agriculture which will yield additional returns and opportunities.  

Well positioned:  Our offices are based in Dakota Dunes, South Dakota and Clarksdale, Mississippi.  This puts us in the heart of the U.S. breadbasket and also allows us to take advantage of local talent from the best agricultural universities as well as local knowledge that can make all the difference when it comes to buying land on the bid versus the offer side of the market.