AgFunder News: ‘A Lot of People Overpromise and Underdeliver’

May 7, 2018 AgFunder News by Emma Cosgrove Farmland investor Shonda Warner has a rare position in the world of agtech. As managing partner at Chess Ag Full Harvest Partners and an occasional angel investor in tech startups, she plays the role of both investor and user, as Chess Ag is both landlord and farmer on much of its 50,000 acre portfolio. Warner grew up in rural Nebraska in a farming family and got her start in finance working as a trader for Cargill in Kansas City. In 2006 she returned to agriculture and started Chess Ag, one of the first agriculture investment funds in the country. Chess Ag manages now roughly $150 million in assets across the US making Warner what she herself calls “the ultimate user” of agtech solutions. We caught up with Warner to find out where frustrations with agtech startups start for farmers, and what low commodities prices mean for tech startups. What do you see as the main challenges for agtech adoption? We’ve spent our lives as farmers and have seen many advancements and failures. Young and well-meaning people come into the game and they believe fully they have the latest thing, and of course, some do and some don’t.  People from the outside don’t tend to give credit to all the people who came before them,  this is really frustrating for farmers. There are often reasons beyond technology as to why applications don’t work.  Perhaps more of a meeting of the minds would help in this area. There is a fantastic crop of new, young farmers coming along, but farming is extremely capital-intensive; it’s very difficult for...

How ESG Farmland Investing Principles Help Rural America Prosper

March 5, 2018, Trust in Food by Nate Birt The investment community can support rural U.S. communities desperately in need of attention by providing farmers with comfortable salaries and sharing business risk, says Shonda Warner, founder and managing partner of Chess Ag Full Harvest Partners. Chess Ag implements environmental, social and governance (ESG) practices into the farms it operates by using conservation practices where they make sense, precisely applying fertilizer and water  and adopting technology that adds efficiency. In the following Q-and-A article, Warner shares her thoughts the role of investors in the rapidly changing food system. Ag capital is attempting to provide access to better food. What makes it better? What are the criteria used to determine food quality currently on the market? Institutional investors and investment funds are providing an additional source of capital into our farm economy. While small compared to family ownership–varying between 5% and 10% of cropland–institutional investors provide an additional source of much-needed capital, contributing to healthier rural communities and food diversity and quality. Do ag investment firms look for anything particular when looking for investing prospects? Internal or external reporting? If so what frameworks are preferred? Ag investment firms consider a wide range of factors when assessing the quality of a farm or agribusiness investment. We look at the potential for returns, consider the risk and how to manage those risks using various mitigation tools as well as the potential length of the investment. We are continually monitoring financial and agricultural market trends and are aware that each farm and situation is unique. Are you implementing or requiring conservation practices on the farms you manage? And if so what...

CSPAN- Farmland Prices

Participants talked about rising prices on farmland and investment speculation that the rising prices had encouraged. The price of farmland in America had doubled over the past decade. Low interest rates and record high crop prices had further spurred interest in investment. Shonda’s comments can be observed...

Destination Unknown: The agricultural land map is getting harder to read as buyers find both challenge and opportunity ahead.

As Matt Palmer looks around Arizona’s Gila Valley, ‌he sees it through the eyes of family and farming. ‌Others see the mountain-ringed river basin as a picturesque area ripe for development. Two very different perceptions, they create competition for acres and make it more challenging by the year for farmers here to buy or rent land they need to maintain their operations. Despite the challenges, this sixth-generation cotton farmer notes they’ve been lucky. VIP Farms, based in Thatcher and named for Matthew’s grandfather, Verle I. Palmer, was able to buy some crop ground last year. The owner had hoped for investor interest, but when that didn’t happen, the land came back up for sale. It was a rare opportunity for Palmer to add acres to his operation. OFF THE PEAK. “In this area, land is going for $2,000 to $10,000 per acre right now. There was a time, though, when owners were asking up to $20,000 an acre. We saw that trend down as less investor money came into the market,” he explains. The land least likely to draw the interest of developers is close to the Gila River. Palmer explains these areas are prone to flooding, making them too risky for anything other than agriculture. The Gila Valley is a tight-knit farming region consisting of some 30,000 acres. Elevation is about 3,000 feet, making it “on the bubble” as far as cotton production is concerned. Despite that, the Palmers grow both Pima and upland varieties, averaging 2.5 bales on the Pima and 3.5 bales on the upland. The farm encompasses about 4,800 acres of leased and owned ground....

Wall Street Journal – Farmland: The Next Boom?

Link to full article Is farmland going to be the next gold? It isn’t as implausible as it may sound. Forecasts are always a sucker’s game, but there are good reasons why the next few decades could see a new boom in farm country—and big money for those who own the land. Demand for food is soaring. The world has consumed more food than it has produced in nine of the past 10 years, Susan Payne, chief executive of agricultural investment firm Emergent Asset Management, told the World Agricultural Investment Conference in London this week. Population is rising fast; another billion mouths to feed will probably be added in just in the next 15 years. And as the developed countries get richer, they want to eat more meat and dairy products. The Chinese eat about four times as much meat per person as they did in the 1980s, says Ms. Payne. These are intensive products. It takes seven pounds of grain to produce one pound of beef. SG Securities estimates that demand for grain alone will rise by 50% to 100% over the next 40 years. We’ve already seen trouble. There were food riots in some countries two years ago. Wheat, coffee and sugar prices have rocketed this summer. Canaries in the coal mine? “We expect to see a resource war around 2020,” says Ms. Payne. A worker irrigates a field in China’s Hainan Province in July. The Chinese eat about four times as much meat per person as they did in the 1980s. ZUMA PRESS They’re not making any more land. Indeed, they’re taking some of it away....