FarmCompany adds dairy to €40m Danish portfolio

The firm is consolidating a group of sustainable farmland assets in Denmark, which now total 1,605 hectares in the country.

Agricultural investment company FarmCompany has acquired a 545-hectare Danish dairy, bringing the value of its agricultural holdings in Denmark to nearly €40 million.

“Our latest acquisition establishes our fifth farm cluster in the country and increases FarmCompany’s areas significantly, allowing us to kick-off 2019 with a total of 1,605 hectares under management,” said Jens Ohnemus, FarmCompany’s chairman.

The acquisition, made last week, bolsters the group’s portfolio in the country, which includes investments in arable land, dairy and pork production facilities, FarmCompany told Agri Investor. A key goal is to improve yields, assure quality, improve health and solve the issue of labor shortages by introducing new ag technology in its dairy facilities – such as mechanization, including robotic milking parlors. It will be run by operating manager Connie Linde, who holds about 1,200 head of Holstein cattle.

Technology and sustainability are also key features in manure management from the dairy operations, the investment company stressed. As a member and shareholder of the biogas plant at Korskro, slurry from FarmCompany’s cattle is delivered to the facility, where it is treated. Nutrient-rich bio fertilizer –  a by-product of the biogas plant – is then returned to the farm.

Underlining the benefits of Denmark as an investment destination, Roberto Vitón managing director of Valoral Advisors told Agri Investor: “Denmark is an attractive place to invest with a good size of available agricultural land for sale, as many farms are still reeling from heavy indebtedness that sparked a drop in farm prices following 2008 crisis.”

Vitón added: “The low-commodity-price environment seen in recent years and the impact of the Russian ban on food imports also depressed farm income, triggering more farmland sales. The fact that there are essentially no restrictions on foreign investment in land is also driving investors’ interest.”

He believes Denmark will be “a rising star” in future, as private and institutional investors are looking for agricultural real assets in areas that offer quality soils, access to water and conducive weather. Competitive agricultural conditions and an established export leadership in pork and dairy exports are available there, he pointed out, with Danish Crown the largest pork exporter. Meanwhile, international cooperative Arla Foods is a key dairy exporter and the largest Scandinavian dairy producer, with €10.3 billion revenue in 2017.