Westchester deployed $330m across 82,000 acres in 2020

Westchester Group Investment Management deployed $330 million across at least 82,000 acres of farmland in the US, Australia and Chile last year and is likely to enter new markets, according to its 2021 annual report.

A comparison with Westchester’s previous farmland report shows the firm added at least 60,000 acres to its portfolio in Australia in 2020, along with smaller additions in the US, Chile and Brazil.

The 10th edition of Westchester’s farmland report provides an overview of the Nuveen-affiliate’s 2.3-million-acre portfolio, which is valued at $8 billion and includes properties producing 43 crops across seven countries. The report details recent developments in Westchester’s farm management and sustainability practices and provides updates on recent investment activity.

“During 2020, the relevance of scale was aptly demonstrated when we deployed $330 million across approximately 82,000 acres in the US, Australia and Chile, despite the constraints imposed by the covid-19 pandemic,” the report’s authors wrote. “As our portfolio grows, with the likely expansion into new geographies, we will continue to uphold high standards for the local partners with whom we work.”

Westchester chief executive Martin Davies described the process for selecting investment geographies in a September podcast, in which he explained that global diversification helps mitigate seasonality, weather and regulatory risk inherent to ag. He added that the firm aims to achieve balance among the world’s primary production regions, with a focus on countries well-suited to large-scale production of certain crops.

“We are interested in olives, we are interested in almonds, we are interested in walnuts, avocadoes, citrus and table grapes; all crops that have a health halo around them and that are seeing significant growth in demand,” said Davies in the interview with ClimateAI. “If you think about some of the locations where there are new opportunities today, Spain and Portugal are countries that we are looking at from an investment point of view.”

Farm management updates included within Westchester’s 2021 report included reference to natural events that reduced California wine grape yields by 13 percent in 2020, trials of biochar to supplement sandy soils and the use of falcons to deter crop-damaging birds. The report also describes use of bees to pollinate avocadoes in Chile and Westchester’s addition of solar energy facilities to farmland properties in the US, Australia and Poland.

“Westchester is exploring the possibility of solar facilities on all ranches in an effort to offset emissions and reduce energy costs,” said the report.

The firm also plans to complete Leading Harvest certification of its viticulture portfolio later this year, its horticultural assets by 2022 and plants to certify its entire row crop portfolio by 2023.

Westchester’s report details the firm’s effort to update key performance indicators developed in 2013 to evaluate ESG performance. This new framework was developed in-house and focuses first on allowing Westchester to track energy use, greenhouse gas emissions, water and soil quality to the property level. Future plans include engaging a “reliable, knowledgeable” third party to review and potentially endorse that framework, addition of property-level information to its public website and expansion into new types of ESG initiatives.

“The framework will enable us to track activities that that advance social objectives, such as operations that contribute to tackling inequality, fostering social cohesion, or improving social integration and labor relations,” the report explains.

Among other developments highlighted in the report is the addition of executives in newly created positions focused on SGMA implementation within horticulture and another focused on ESG and sustainability across Westchester’s entire portfolio.