Field Notes: British farmland prices hit record high; Global Awards open for voting; Impact Ag Partners changes CEO and targets US

British farmland prices have hit a record high, Agri Investor Global Awards open for voting, Impact Ag Partners appoints a new CEO and targets US expansion, Louis Dreyfus and Nature Conservancy collab could raise capital in the future, and more. Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only. Tips and feedback to: binyamin.a@pei.group.

First look

Record price: farmland in England and Wales broke the £9,000 per acre barrier for the first time in Q4 2023. (Image: Getty)

Scaling new heights

The value of farmland in England and Wales exceeded £9,000 ($11,400; €10,500) per acre for the first time in 2023, according to data from British sales and lettings agency Knight Frank.

The Knight Frank Farmland Index, which tracks the value of bare land that has no houses or buildings in England and Wales, rose by 2 percent in the final quarter of 2023 to hit an all-time high of £9,152 per acre.

“On an annual basis, average farmland values increased by 7 percent, a performance that only gold could draw level with,” said the Farmland Index report. “The FTSE 100 equities index could only muster growth of 4 percent, while most house price indices fell into negative territory during the year.”

Farmers in England and Wales have not been immune to the effects of high inflation, rising borrowing rates, weak commodity markets and a drop in farm subsidies, but many have resisted the urge to sell despite the challenges, which has created a significant lack of supply.

The total acreage for sale “was still well below 100,000 acres, which is historically very low,” said Knight Frank.

Andrew Shirley, head of rural research at Knight Frank told Agri Investor: “In the UK, farming is generally a multi-generation activity and so there are many factors at play, which mean owners are keen to retain their properties even when the economic factors are strained. Many producers are hoping that an increase in environmental payments will make up for the loss of the Basic Payment Scheme.

Read the full story here.

They said it

“The effect that that has as a party in a transaction is that it chills the transaction; it creates friction in that transaction. There’s not a legal answer to it”

Stoel Rives attorney Todd Friedman discusses the potential impact of increased scrutiny on foreign investments into US farmland, the frequency of which has created some public anxiety.

Awards

Global Awards 2023 – vote now!

The Agri Investor Global Awards 2023 are now open for voting.

Our awards are completely independent, which means your vote will help decide which asset managers, LPs, deals and companies best represented the asset class in 2023.

The awards cover the 12-month period between January 1 and December 31, 2023.

You have until midnight PST on Wednesday, February 7, 2024 to submit your vote.

VOTE HERE.

Conversation

Louis Dreyfus and Nature Conservancy could fundraise together

A collaboration between Louis Dreyfus Company and non-profit The Nature Conservancy could eventually solicit capital to support regenerative agricultural practices and efforts to eliminate deforestation and conversion of agricultural land.

Greg Fishbein, TNC’s director of agriculture finance, told Agri Investor the LDC collaboration is at its early stages and still focused on building on existing work developing financial mechanisms and incentives to encourage shifts in farmer behavior.

He explained that although TNC’s NatureVest unit – which helps connect investors with relevant sustainability opportunities when appropriate – is not yet involved in its partnership with LDC, that could change as the projects develop.

“We certainly contemplate that, as those [projects] get further fleshed out, there will be an interest and need in attracting capital to that, including various forms of capital including working with banks but potentially investors of various types in funds that could be set up to support that,” he said.

“That’s part of the partnership; to figure out what those products and mechanisms are and how to attract the capital.”

Read the full story here.

Impact

DOWNLOAD: Agri Investor Impact Report

The Agri Investor Impact Report is now available to download and read online.

This year’s report looks at the growing convergence between impact investing and food production, and how emerging markets and development finance institutions are combining to bring more private capital to the sector.

We also take a look at the penetration of AI and robotics in food production as well as land-based aquaculture’s potential contribution towards safeguarding marine biodiversity.

Read about these topics and more in the Impact Report.

Fertilizer fundraising

Fertilized: fertilizer scarcity and high prices have plagued farmers across the world since Russia’s invasion of Ukraine in 2022. (Image: Getty)

USDA feeds farmer prospects with $207m fertilizer support

US Department of Agriculture Secretary Tom Vilsack announced the USDA will invest $207 million in renewable energy and domestic fertilizer projects to lower energy bills, generate new income and create jobs.

Strengthening the competitive position of US farmers was among the motivations cited for the effort, which is supported by programs created by the Inflation Reduction Act.

Among the projects selected for support include the addition of solar panels to soybean-planted farmland in Pennsylvania; an anaerobic digester in North Carolina; and an energy-saving refrigeration unit for a meat company in South Dakota.

The funding for the fertilizer-related projects comes from a Fertilizer Production Expansion Program created by the Biden administration in response to high prices attributed to consolidation in the market and the war in Ukraine. FPEP funding has already invested $166 million into 40 projects designed to increase domestic fertilizer availability.

“This funding advances President Biden’s Investing in America and Bidenomics agenda to grow the nation’s economy from the middle-out and bottom up, create jobs and spur economic growth in rural communities by increasing competition in agricultural markets, lowering costs and expanding clean energy,” according to USDA’s statement.

Market outlook

Gro Intelligence maps ag’s year ahead

Data and analytics service provider Gro Intelligence said slowing Chinese growth, US interest rates and El Niño are among the most important factors shaping global ag markets in 2024.

“Price pressures on food and beverage companies will remain benign for a second year running. The consumption-weighted Food Price Index was down 3.7 percent in January 2024 from a year earlier, said the report.

“Still, the index is up 12 percent since 2020, when global food price gains began accelerating. Tight US monetary policy has exported inflation to food importers.”

The TPG-backed company described how shifting rainfall patterns that began in the second half of 2023, which are likely to last through June, are benefiting key growing regions of the Americas and producing erratic weather and dryness in Southeast Asia.

“Australia, with smaller 2023 wheat production due to El Niño, will likely play a diminished role in global wheat trade for much of 2024. And Argentina, normally the world’s top exporter of soybean meal and soybean oil, will likely regain some of the market share it lost in 2023 to competition from the US,” analysts wrote.

The report also predicted 2024 will see a reversal of recent years’ trend of declining stocks of corn and soybeans for most countries other than China due to strong production in the US, Brazil, Argentina and elsewhere.

People

Warakirri’s green hire

Warakirri Asset Management, the farmland asset manager based in Australia, has appointed Nikki Jordan to the newly created role of head of sustainability.

Jordan will lead development of a group-wide sustainability and ESG strategy for Warakirri and will report to managing director Jim McKay. Jordan will oversee implementation of the new strategy and reporting against it across the firm’s various business lines.

She was most recently sustainability and environment manager at Australian Securities Exchange-listed almond grower Select Harvests and held roles at City of Melbourne and Bank Australia prior to that.

Warakirri is a signatory to the Principles for Responsible Investment, has been certified carbon neutral by Climate Active, and in 2023 became one of the first Australian agriculture asset managers to be certified under the Leading Harvest Australia Farmland Management Standard.

In a statement, McKay said: “Warakirri has a long and proud history of providing ethical and sustainable investment outcomes right across our capabilities and this continues to be one of our top priorities. Nikki’s strong and diverse sustainability skillset and her knowledge of the evolving policy landscape make her a valuable addition to our team.”

Impact Ag shuffles leadership, targets US expansion

Impact Ag Partners has appointed Hugh Killen to the role of CEO and managing director, Australia, replacing co-founder Bert Glover who has moved internally to lead the firm’s expansion in the US.

Killen is the former chief executive of Australian Securities Exchange-listed cattle giant AACo and has left his roles as chair of Climate Asset Management and chair of the EMEA advisory team at Pollination to take up his new position with Impact Ag. He will remain a senior adviser to Pollination.

Glover will move to the US in his new role as the firm seeks to expand beyond Australia.

Last year, Impact Ag launched a joint venture in the US alongside partner Riverstone Holdings, called Agriculture & Natural Solutions Acquisition Corporation, a blank-check special purpose acquisition company that aims to create “a platform that decarbonizes the traditional agriculture sector and enhances natural capital at scale.” It is listed on the NASDAQ.

Read the full story here.

VC fundraising

Infinite Roots, a German biotech company specialising in mycelium technologies, raised a $58 million Series B funding round led by Dr Hans Riegel Holding, with participation from EIC Fund, REWE Group and Betagro Ventures, among others.

Bluewhite, an Israeli robotics start-up, raised $39 million in a Series C funding round led by Insight Partners, with participation from Alumni Ventures, LIP Ventures and Entrée Capital, among others.

Elo Life Systems, a North Carolina-based ingredients start-up, raised $20.5 million in a Series A extension round having raised $24.5 million in its 2023 Series A. The latest round was co-led by DCVC Bio and Novo Holdings, with participation from Hanwha Next Generation Opportunity Fund, AccelR8 and Alexandria Venture Investments, among others.

Intelligent Growth Solutions, a Scottish vertical farming technology provider, raised £22.5 million in Series C funding round backed by COFRA Holding, DC Thomson, S2G Ventures and Ospraie Ag Science, among others.

Chunk Foods, a Mexican plant-based alternative meat start-up, raised $7.5 million through a seed extension led by Cheyenne Ventures and announced a strategic collaboration with Better Balance.

Kaffe Bueno, a Danish start-up that upcycles coffee byproducts for personal care and food industries, raised €6.2 Million in Series A round led by Borregaard, with participation from the EIC Fund, Dalgaard Group, and The Yield Lab, among others.

AquaExchange, an Indian Internet of Things solutions provider to aquaculture farmers, raised $6 million in a Series A funding round led by Ocean 14 Capital with participation from Endiya Partners and Accion Venture Lab, among others.

Also in the news…

Roc Partners to buy 25% stake in New Zealand land portfolio

The third acquisition for the Roc Agri+ Infrastructure Fund is also Roc Partners’ first agricultural investment in New Zealand (Agri Investor).

Political risk in agriculture flares up again in Germany

Following protests over ag-related environmental policies in Australia, Spain, France and the Netherlands in recent years, German farmers came onto the streets this month in a reminder of how quickly political decisions can raise the ire of farmers (Agri Investor).

CPP backs early-stage climate fund ArcTern Ventures III

Investing in venture-stage technologies ‘that will assist the energy evolution’ are part of the pension’s plan to meet its net-zero 2050 target (New Private Markets, registration required).

China relaunches voluntary carbon credits halted in 2017

China has relaunched its long-stalled voluntary carbon offset market, offering funding to projects with the potential to curb emissions but that struggle to generate profits (Bloomberg Law).

Arcern Ventures gathers $335m for third climate tech fund

Fund III’s LPs include TD Bank Group, Allianz, Church Pension Group, OPTrust and Credit Suisse Asset Management, among others (Venture Capital Journal, registration required).

Investors should be thinking about Indian private markets – UBS

Speaking at the Asian Financial Forum, Min Lan Tan, head of the APAC investment office at UBC Global Welath Management, told delegates that private investment could take India to the ‘next level’ (Private Equity International, registration required).


Today’s letter was prepared by Binyamin Ali, Chris JaniecDaniel Kemp  and Tom Taylor