An indexing company has launched a monthly farmland index for Iowa as part of its goal to “democratise farmland” and make it a tradable commodity, according to a press release.
Peak Soil Indexes (PSI) has launched the Peak Soil Iowa Farmland Value Index (PSIFVI) to be used by the investment and agricultural communities. PSIFVI replaces Peak Soils’ predecessor index, the quarterly Peak Soil Iowa Cropland Value Index, enabling much more timely pricing information.
“This is an up-to-date, versatile index, not limited to being a mere historical reference point,” wrote PSI’s founder and president, Paul Kanitra, in a statement. “The new index takes us closer to our goal of ‘democratising farmland’. With a timely, transparent index, farmland will shortly become ‘alive’ and a functional tradable commodity.”
The new index will cover approximately 50 Iowan counties and will be constructed from “observable, recorded documentation, not surveys”, reads the release. “The company believes survey pricing is subject to biases and can prove to be unreliable. Real arms-length transactions assure accuracy and confidence.”
Few farmland indices exist in the farmland investment market; a major reference point is the NCREIF Farmland Index which releases data on a quarterly basis.
Kanitra was the founder of a commercial real estate fund before launching Peak Soils and has also advised a global fixed income hedge fund in the past.