Research

In-House Research Leads to Investment Success

Research plays a crucial role in all phases of our investment process from acquisitions to property management to dispositions. Our research publications are used to educate potential investors, while keeping our current clients informed of topics relevant to their portfolio.

All of our in-house research publications are accessible to the public.

Farmland Investor Archive

2014 Fall/Winter: Stewards of Capital, Stewards of Land

HAIG has a long history of providing clients with best-in-class farmland investment management. Our clients’ farmland investments provide exceptional returns to meet the current and future financial obligations of their beneficiaries. However, this is not HAIG’s only contribution. As one of the largest institutional farmland investment managers in the United States, HAIG also plays a major role in improving the environmental conditions of the farmland assets we manage and positively influencing the communities in which we operate. One prime example of HAIG’s positive impact is the transformation of Siskiyou Red Rock.

Farmland Investor Archive

2014 Spring: HAIG and FMS Join Forces to Offer Full Service Instutional Farmland Investment Management

HAIG is pleased to announce the acquisition of its long-time property management partner, Farmland Management Services (FMS). The transaction, completed in March, formalizes a relationship of more than 25 years, bringing together farm-level operational expertise and institutional investment management in a single organization. FMS, based in Turlock, California, will continue to provide best-in-class farm management for more than 280,000 acres of HAIG client properties throughout the U.S. In addition, through the enhanced alignment of the groups, the combined team will further develop robust acquisition, risk management and stewardship programs.

Farmland Investor Archive

2016 Q4, Hancock Farmland Investor: 2016 Farmland Investment Performance

U.S. farmland properties returned 7.1 percent in 2016, 326 bps below 2015 returns and continued the downward correction that began in 2014. U.S. private farmland investment returns fell 326 bps from 2015 and over 500 bps since 2014, largely driven by three factors: commodity prices, farmland values and on-farm profitability. Four consecutive years of strong production have led to increased ending inventories of crops in the U.S. and declining prices. The significant decline in commodity prices has led to lower on-farm cash receipts (revenues), which, in turn, has led to a decline in on-farm profitability, despite a decline in production costs. The drop in commodity prices and on-farm profitability has led to a decrease in farmland values. As a result of these three factors, farmland operating income returns have declined from 7.9% in 2014 to 5.2% in 2016 (270 bps), while land appreciation returns have dropped 4.5% in 2014 to 1.9% in 2016 (260 bps).

Farmland Investor Archive

2016 Q3, Hancock Farmland Investor: U.S. Farm Economy

U.S. farm sector profitability is forecast to decline for the third consecutive year. USDA forecasts net cash farm income for 2016 at $90.1 billion (down 14.6% from 2015), while net farm income is forecast at $66.9 billion, down 17.2% from 2015. If realized, 2016 net farm income would be the lowest since 2009. Meanwhile, farm sector equity is forecast to decline 3.1% from 2015 to $2.5 trillion, farm sector assets are expected to decline 2.1% and farmland debt is forecast to rise 5.2% from 2015, pushing farm sector debt-to-asset and debt-to-equity higher.

Farmland Investor Archive

2016 Q2, Hancock Farmland Investor: Farmland and Timberland: Working Together in a Mixed Asset Portfolio

Farmland and timberland assets have been used and tracked as components of institutional portfolios for over two decades, providing historically strong performance, low to moderate risk, and favorable diversification characteristics. In general, farmland and timberland have been managed separately and not in an integrated fashion. Yet, both farmland and timberland are income generating and land appreciation investment vehicles with biological growth components, offering comparable risk-adjusted returns and inflation protection. Evaluating and structuring coordinated investments in these two natural resources has the potential of generating operational efficiencies and augmenting the risk-reducing diversification of a broader portfolio. This article provides a comparison of the risk-return profile of a combined farmland/timberland vehicle together with commercial real estate and other financial assets. Further, we compare performance results over the past twenty-five years for pure farmland and pure timberland to a pro-forma combined timberland/farmland vehicle.

Farmland Investor Archive

2016 Q1, Hancock Farmland Investor: 2016 USDA Prospective Plantings Report: Potential Impact on the U.S. Farm Economy

Higher expected corn plantings in 2016/17 are projected to boost corn production to a new record. The increase in acreage is expected to place additional downward pressure on corn prices in 2016/17. In its March 31 Prospective Plantings report, the USDA surprised many analysts by projecting corn acreage to increase 6% over the 2015/16 crop year despite poor economics and low prices for corn over the past year.

Farmland Investor Archive

2015 Q4, Hancock Farmland Investor: 2015 Farmland Investment Performance

Hancock Agricultural Investment Group, (HAIG), is pleased to introduce its first Hancock Farmland Investor newsletter. The Hancock Farmland Investor, published on a quarterly basis, includes a series of key indicators related to agriculture product production, prices and trade, along with farmland income and returns. Tracking these indicators is essential to being an informed farmland investor. Each Hancock Farmland Investor newsletter will include a summary of one of our research projects of interest to farmland investors. Our initial newsletter looks at 2015 NCREIF Farmland Property Index returns.

Farmland Investor Archive

2015 Spring/Summer: Despite a Difficult Year for Agriculture, HAIG Farmland Investments Provided Steady Returns

From drought to drones and seed traits to port strikes, 2014 marked a year of challenge and change for agricultural markets. Commodity prices continued to soften with the S&P GSCI Agricultural Enhanced Select Total Return Index–which measures the total return from corn, soybeans, sugar and wheat–down 8.4%. However, amid agriculture’s ever evolving landscape, institutional farmland investments continued to provide steady returns for their beneficiaries. In 2014, HAIG’s Global Farmland Composite, representing $2.2 billion in assets under management across three countries and more than 20 commodities, produced 6.2% income and 4.9% appreciation for a total return of 11.4%, after fees.

Farmland Investor Archive

2013 Spring: Strong Farm Income Continues in 2012

Despite widespread drought throughout the Midwest and Plains states, U.S. net farm income reached $112.8 billion in 2012. 2012 marked farmers’ second most profitable year on record after earning $117.9 billion in 2011, and was 40.3 percent higher than 2010 net farm income, also a record at the time. Strong demand from top U.S. trade partners Canada, China and Mexico coupled with short crops worldwide drove prices across corn, soybeans and wheat. Agricultural exports totaled $141.3 billion dollars at year-end 2012, up 35.9 percent from the previous year. Reflecting continued high incomes and low interest rates, farmland again saw capital values rise in 2012. Driven by both strong income and appreciation, the performance of the Hancock Agricultural Investment Group (HAIG) improved relative to 2011.

Farmland Investor Archive

2013 Fall: The Rise of Farmland as an Institutional Asset Class

Most institutional investors have yet to add farmland to their portfolios. Perhaps their hesitation is attributable to a cursory understanding of the benefits of investing in farmland. In this newsletter, we analyze the returns of stocks, bonds, and farmland during various periods between 1960 and 2012 and examine the historical performance of the farmland asset class in different inflationary environments. We also introduce Danielle Harris, Investment Analyst, and Addison Taylor, Southern Region Acquisitions Manager, and congratulate members of our team on recent promotions.

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