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

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.

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.

Farmland Investor Archive

2012 Spring: Strong Income Drives Farmland Performance in 2011

Record demand for U.S. farm products drove net farm income to nearly $100 billion and agricultural exports to $137 billion in 2011. Exports to China, the largest foreign purchaser of U.S. farm products, grew 30 percent. The value of U.S. corn and soybean exports grew 42% and 20%, respectively. Farmers are using the additional income to pay off debt: in 2011, the debt-to-equity ratio of the farm sector fell to 11.6%, the lowest level since the USDA began tracking the statistic in 1960. Farmland prices, particularly in the Corn Belt and Delta regions, continued to appreciate in 2011. Driven by strong income and appreciation, the performance of the Hancock Agricultural Investment Group (HAIG) farmland portfolio improved relative to 2010. Both income and appreciation returns rose year-on-year for row crop and permanent crop investments. This newsletter evaluates HAIG’s 2011 performance and highlights the strong income-producing ability of farmland investments. The newsletter also discusses our expectations for farmland performance in the context of the global macroeconomic environment.

Farmland Investor Archive

2012 Fall: Drought and Farmland Investments in the US

As has been widely reported, severe or greater drought affected nearly 70 percent of the contiguous United States in 2012. However, ample confusion exists regarding the terminology used to describe drought conditions. Moreover, this confusion creates uncertainty about how these conditions affect agricultural investments. The purpose of this newsletter is to inform institutional investors of potential indicators of drought conditions, identify drought classifications, and establish the potential affects that drought has on the performance of agricultural investments in the U.S. We also introduce Paul Joerger, Director of Asset Management, and congratulate members of our team on recent promotions.

Farmland Investor Archive

2011 Spring: Strong U.S. Farmland Performance Reflected in HAIG 2010 Returns

Strong international demand for U.S. agricultural exports and surging commodity prices fueled record cash receipts and significant gains in farm income in 2010. Exports totaled $115.8 billion, led by gains in bulk soybeans and cotton. Farm balance sheets also improved in 2010, underlining the strength of the overall U.S. agricultural economy. Current farm income supports land values and the U.S. farm sector debt-to-income ratio is down to 2.9 from 4.0 in 2009, while debt-to-equity remains at 12.8%, well below the 40-year average of 18.4%. In this environment, Hancock Agricultural Investment Group (HAIG) farmland performance improved relative to the prior year, with permanent cropland income performance, particularly that of pistachios and walnuts, benefiting most from increases in global demand. This newsletter analyzes the factors driving overall performance of the HAIG farmland portfolio and compares HAIG farmland performance to that of other asset classes and the NCREIF Farmland Index over time.

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