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.

White Paper Archive

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.

White Paper Archive

2013 June: Farmland Investment Opportunities for Canadian and Australian Investors

Canada and Australia have a bounty of natural resources which make important contributions to their economies. External demand for these resources affects trade balances and directly impacts the relative value of each country’s currency. At the moment, both currencies are historically strong as a result of foreign demand for energy and mineral products. Recent developments in global commodity markets suggest that softer mineral and energy commodity prices in the near future could provide Canadian and Australian investors opportunities to diversify their portfolios with Canadian and Australian farmland. This research brief describes how currency affects farmland investments, highlights important economic drivers in Australia and Canada, and proposes an investment strategy to help Canadian and Australian investors take advantage of potentially opportune timing to add Australian and Canadian farmland to their portfolios.

White Paper Archive

2013 February: An Investment Outlook for Institutional Farmland Investors

The strong sustained performance of farmland assets over the past decade in a period of turbulent and uneven global economic growth suggests farmland investments can help diversify traditional investor portfolios. A key benefit of farmland assets is that the risks inherent in production agriculture are distinctly different from the risk profile in nonagricultural sectors of the economy. Many institutional investors, however, are hesitant to add farmland to their portfolios because they do not fully understand the dynamics of the asset class. Many investors are concerned about the
recent large increases in farmland capital values and are asking, “What happens next?” This research note provides investors with a short-, medium-, and long-term outlook for U.S. farmland investments.

White Paper Archive

2013 January: A Play on Commodities via the Land They Grow On

Institutional investors are increasingly seeking alternatives to the traditional investment choices of stocks and bonds. The current state of uncertainty in financial markets is high with equity markets now moving toward their previous peaks and fixed income yields near historic lows. In this environment, pension funds are increasingly evaluating real assets – tangible assets with real intrinsic value – to improve return on total asset-liability risk.

White Paper Archive

2012 June: Farmland Returns and Inflation

The farmland asset class offers investors protection against inflation. Inflation, however, does not deterministically cause farmland returns to increase or decrease. Instead, inflation is a symptom of the
underlying health of the general economy. The price of food tends to rise during inflationary periods. Thus, farmland returns exhibit positive correlation with inflation.

White Paper Archive

2012 January: An Assessment of How Current Problems in the Global Economy Affect the Demand for Food

The historical performance of the agriculture sector suggests investment portfolios could benefit from the addition of farmland investments. The risk inherent in production agriculture largely differs from the risk in nonagricultural sectors of the economy and may help diversify investor portfolios. Investors, however, must consider many factors before adding farmland to a portfolio. The current success of the U.S. farm sector in the wake of an extraordinarily weak global economy underscores the differences. Portfolio managers have begun asking how recent events, such as the Eurozone debt problem and the U.S. financial crisis, will affect global food demand and U.S. farmland investments.

White Paper Archive

2011: U.S. Farm Economy Update Ag Sector Thrives in 2010

2010 was a banner year for U.S. agriculture, with growing exports and strong commodity prices driving up farm net income and fueling debt repayment. Given the healthy outlook for U.S. agricultural demand, positive trends in income, trade and financial strength are expected to continue in 2011.

White Paper Archive

2011: Benefits Of Farmland Investments

This Research Note, developed by Hancock Economic Research and the Hancock Agricultural Investment Group, evaluates the historical performance of farmland relative to traditional financial and equity real estate investments for the 1971 to 2010 period. This Research Note includes analysis of: the historical risk and return of farmland relative to traditional investments; the diversification benefits of farmland investments; and farmland investments as an inflation hedge.

White Paper Archive

2010 July: A Cash Flow Comparison of Farmland, Stocks and Bonds and Other Real Assets

As institutional investors seek to diversify their traditional equity and fixed income portfolios by including real assets such as farmland, timberland and commerical real estate, they are finding farmland to be an attractive long-term investment that offers a current income return component, strong total performance, capital preservation, low to moderate risk and favorable diversification characteristics.

White Paper Archive

2010 August: Second Quarter Economic Update_US Agricultural Exports

Conclusions: The global agriculture industry has resumed the pattern of growth temporarily interrupted by the worldwide economic problems that began in 2008. A weaker US dollar continues, global dietary trends and continued strong agricultural trade growth with China create a positive long-term outlook for the American farmer.

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