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.

Many of our in-house research publications are accessible to the public via our website. Please click Sign Up to request access to password-protected documents.

Current

Q3 2016, 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.

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November 2016, Research Brief: Donald Trump’s Election and Its Impact on the Global Agricultural Markets

Donald Trump was elected president and the Republican Party took control of both the Senate and the House of Representatives on November 8, 2016. The election results feel very similar to Brexit in terms of polls underestimating how far voters were willing to go to express their frustration and anger. With a full sweep, Trump may face fewer obstacles in pushing through his agenda. As with any candidate, it is difficult to parse out what a candidate says they will do versus what they will try to implement. This election is no different, but nevertheless, a high degree of policy uncertainty exists. The markets do not like uncertainty- as we saw in the initial Asian and European market responses to Trump’s victory.

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Q2 2016, 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.

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Q1 2016, 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.

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February 2016 White Paper: Farmland Returns, Gauging the Impact of Rising Interest Rates

Farmland assets have delivered consistently strong returns over the past two decades. Private institutional investment in farmland delivered an average annualized return of 12.4 percent, while row and permanent crops generated average annualized returns of 11.4 percent and 12.8 percent, respectively over the past twenty years (1996 – 2015). In the six years following the Global Financial Crisis, investments in farmland outperformed timberland investments, the S&P 500, Small Cap Stocks, Corporate Bonds, and Long-term Government Bonds, generating average annualized returns of 14.8 percent for the period 2010-2015 (Figure 1). These strong returns on farmland assets coincide with an extended period of low interest rates and the Federal Reserve’s unprecedented accommodative monetary policy following the Global Financial Crisis.

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Q4, 2015 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.

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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.

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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.

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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.

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