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.


January 2020, Farmland Investor: U.S. Farm Economy

The well-being of the U.S. farm sector received a mixed review in the November 2019 USDA Farm Income and Wealth Statistics report, which estimated that 2019 net income for farms rose 10% over 2018’s, reflecting close to flat cash receipts, stable costs and greater government support. This last factor was the single largest contributor to gains in 2019 net farm income, reflecting a 64% year-over-year increase in direct government payments, to $22.4 billion – the highest since 2005.


August 2019, Hancock Farmland Investor: Taking Stock of Farmland Cash Yields: a Comparative Analysis

Institutional investors seek to diversify their multi-asset portfolios by acquiring real assets such as farmland, timberland and commercial real estate. Farmland’s strong cash yield is a significant benefit that could provide stability in today’s environment of market volatility. Historical comparative analysis shows that farmland has delivered stable cash yields. While cash yields can vary depending on crop type and geographic location, utilizing a strategic mix of options – crops, management strategies, investment regions, farmland assets can help institutional investors realize multiple levels of competitive cash yields.


Natural Resource Flash Report, August 2019: U.S.‑ China Trade Tensions Escalate

On August 6th 2019, China ordered its state-owned enterprises to suspend all agricultural imports from the U.S., in response to the recently announced 10% tariffs on the remaining $300 billion worth of Chinese goods by the U.S starting in September. Private buyers in China have followed suit, citing uncertainties in the U.S.-China trade talks.


May 2019, Hancock Farmland Investor: Estimated U.S. 2019 Planted Acreage Declines 1.3% y-o-y, Led by Soybeans and Wheat

The March 2019 USDA Prospective Plantings Report predicts that soybean, wheat, cotton and rice acreage will contract this year, with some offset from increased corn acreage. The overall decline in row crop planted acres reflects reduced price expectations for major row crops such as corn, cotton, rice, soybeans and wheat, with soybeans experiencing the biggest acreage decline – 5% – in response to lower soybean prices. The conservative assessment going forward in 2019 for row crop prices looks to be on solid ground given the high carry-over stocks from 2018, anticipated 2019 crop yield gains, and increased production in some key non-U.S. producing regions – Argentina, Brazil and Russia.2 However, delays in planting this spring due to unusually wet weather and flooding in the Midwest could negatively impact 2019 production levels and boost the outlook for prices, especially for corn and soybeans.


April 2019, Natural Resource Flash Report: Canada and China Clash over Canola Trade

In March 2019, China rescinded the export licenses of the two largest Canadian canola companies, Richardson International and Viterra, to ship canola to China, citing non-compliance with plant health requirements. These two companies own four of the fourteen major canola crushing facilities in Canada. China also intensified its inspection measures and standards for canola seed imports from Canada, and intends to import far less product from Canada, according to Chinese Agriculture Ministry officials.


February 2019, NCREIF Farmland Returns Improve in 2018 After Bottoming Out in 2017

U.S. farmland properties returned 6.7 percent in 2018 (55 bps above 2017). This marked the first improvement in annual returns after four consecutive years of declines. Annual cropland properties returned 5.9 percent in 2018 (117 bps above 2017), and permanent crop properties returned 8.2 percent (9 bps above 2017). In 2018, institutional farmland investment (as reported by NCREIF) grew in terms of both the number of properties and value.


January 2019, Natural Resource Flash Report

Impact of Shutdown on Timberland and Farmland
We believe the extended federal government shutdown will be very limited in meaningful, direct impacts on the U.S. timber or forest products sectors. On the supply side, timber harvests on U.S. federal forests have not been a significant or consistent source of raw material to producers of lumber, wood panels or pulp since the early 1990s. In addition, restricted federal services are not likely to result in major impediments to the production or transport and sale of timber and forest products domestically, since most of the regulatory governance of the timber and forest products industries is at the state and local level, with limited oversight by the federal government. The federal government does have a significant role in funding forest fire control efforts (primarily in the western U.S.), but this will probably not be a major concern given the timing of the shutdown in the winter, when fire risk is near zero.


January 2019, Hancock Farmland Research Brief: Total Trade Mitigation Payments Announced Reach $9.6 billion: Implications for Agriculture and Farmland Investments

On December 17, 2018, President Trump announced the second round of financial aid to U.S. farmers most impacted by the retaliatory tariffs on U.S. agricultural products imposed by major U.S. trading partners in 2018. The Market Facilitation Program (MFP) payments will be distributed by the USDA Farm Service Agency in early 2019, with the USDA estimating that payments will total $4.8 billion for this round, on top of the $4.8 billion sent to farmers in fall 2018. The impact of this additional trade mitigation payment to farmers is most material to producers of soybeans, grain sorghum, cotton, hogs and sweet cherries. Regionally, farmers in the Midwest will receive the vast majority of the aid.


December 2018, Hancock Farmland Investor, The U.S. Farm Economy

The USDA Farm Income and Wealth Statistics report released 11/30/2018 projected a 12% decline in 2018 net farm income, partially reversing the gains realized in 2017. Rising costs and relatively flat cash receipts were the key factors driving the reversal in the direction of net farm income. The largest single component in rising production costs was an 18% rise in interest expenses, driven by increased debt levels combined with higher interest rates. Increased government payments moderated the overall drop in farm income, increasing 18% to $14 billion. In addition, the farm sector debt-to-equity ratio is on track to move higher in 2018, rising from 15.1% in 2017 to 15.6%, driven largely by increasing real estate debt.


Hancock Farmland Research Brief: United States-Mexico-Canada Agreement

On September 30, terms of a comprehensive trade agreement among the US, Mexico and Canada were finalized. The new United States-Mexico-Canada Agreement (USMCA) culminates an extended year-long period of negotiations to update the North American Trade Agreement (NAFTA). The new agreement retains many of the core elements and structure of NAFTA, with the most prominent changes focused on: trade in cars, new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions. The most impactful changes for the farm sector in the new agreement were the expansion of US access to Canadian dairy and poultry markets, and an equalization in terms of trade for grains between Canada and the US. The agreement is targeted to be signed by the three participating countries before the end of November, possibly at the G20 summit in Buenos Aires, Argentina, and all three countries would then still need to ratify the agreement. Congress will probably not address ratification until 2019, after the mid-term elections, and since the approval process will take time, most of the new USMCA provisions won’t go into effect until 2020.

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