Graham & Dodd Farmland℠ Fund LLC
US farmland is a $2.4T asset class that has outperformed the SP500 with notably less volatility since 1970 while exhibiting little or no correlation to most asset classes. Despite these attractive investment characteristics, traditional institutions (e.g. pension plan sponsors, endowments, foundations, etc.) own less than 1% of all farmland in the U.S. The largest holders are family farmers and related entities, religious institutions and insurance portfolios. The Graham & Dodd Farmland℠ Fund I, LP (the “Fund”) offers investors access to this non-correlated, low volatility and under-penetrated asset class through a farmland roll-up strategy designed to improve row crop (soybean and corn) farms, make them more productive by employing modern farming methods and equipment and improve their value. US farmland offers investors the opportunity to benefit from demographic megatrends such as emerging market population growth and increased consumption of protein per capita while the supply of high quality farmland continues to dwindle.
We believe that to generate attractive returns in farmland, you must add value in each step of the investment process – acquisition, improvement, management and divestiture. The Fund’s investment manager, Graham & Dodd Farmland℠ Fund (the “Firm”) looks for underperforming farmland that can be improved with the right combination of capital and expertise. The members of the Fund’s general partner and Board of Advisors include several large scale, commercial farm operators and the Firm has contracted Busey Ag Services (managers over $1 billion in corn and soybean farmland currently), an experienced team of farmland managers who can help evaluate and execute the acquisition and improvement opportunities available in farmland.
The US Corn Belt is the some of the most productive land in the world for corn and soybeans. Farming today is a sophisticated industry using advanced land management, land science and agricultural high technology. However, many small farmers are not able to capitalize on these advancements due to the capital intensity of new equipment and land management techniques. Farming has become a business of scale and requires substantial capital and expertise.
Unlike most of the world (Europe and Latin America), US corn and soybean farming is no longer a heavily government subsidized business and large scale farms in the U.S. can operate profitably without subsidy. New methods, equipment and seed help US farmers feed the world’s growing appetite for grain and protein. The Graham & Dodd Farmland Fund℠ LLC’s professional farm managers will cash lease the Fund’s farmland to top-tier commercial farmers who use the latest farming technology and equipment to generate superior crop yields and improve the value of the Fund’s farmland holdings.
Farming is a cyclical industry but by owning and cash leasing its farmland to experienced commercial farmers, the Fund can generate lease income and insulate itself from annual crop price volatility. The Fund will distribute its cash income to limited partners while improving the performance, lease rates and disposition value of the portfolio properties. Farmland can play an important role in institutional, individual and family office portfolios. The Fund seeks to provide investors with current income, capital appreciation and limited crop risk with low historical volatility and correlation to traditional financial asset classes.