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Gladstone acquires California almond orchard for $8m

The purchase of the 761-acre property comes as USDA predicts record production of the nut.

Gladstone Land Corporation has acquired a 761-acre almond orchard in Merced County, California for $8.2 million from an unidentified seller.

MacLean, Virginia-headquartered Gladstone announced Monday that the property, which has 742 planted acres irrigated in five on-site wells, will be operated on a long-term lease with an international agriculture company that currently leases two of Gladstone’s other almond properties.

Gladstone Land managing director Bill Reiman said the orchard purchased Monday is adjacent to another owned by the NASDAQ-listed farmland REIT and that plans call for the existing tenant to operate both fields.

“This is another purchase where we acquired only the land, while the tenant retains ownership of the improvements until termination of the lease, at which time the improvements belong to us,” he explained. “We believe this is a low-risk acquisition that will yield a strong cash return.”

Gladstone president and chief executive David Gladstone highlighted that the acquisition was the company’s third of the quarter, following its $8.5 million purchase of a potato property in Texas and acquisition of a California fig orchard for $23 million last month.

“We continue to have a long list of potential farms to purchase,” added Gladstone.

In early October, the USDA’s Foreign Agricultural Service reported that, although trade disputes were expected to lead to a decrease in almond exports to China, India and Turkey, surging shipments to the European Union, Japan and the Middle East would lead to a 2 percent increase in overall exports to 710,000 tons.

USDA also wrote that US almond production was on pace to rise 8 percent this year and reach a record 1.1 million tons, despite cold temperatures.

“Frosts during blooming hit some orchards hard, with younger trees more severely than older trees,” the USDA wrote. “Weather during the spring was variable, but as temperatures warmed up in May, nuts sized well.”