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The only issue with that is that there are few liquid ways to invest in it. The four that come to mind are Adecoagro (AGRO), Gladstone Land (LAND), Sprott Resource Corp (SCPZF.pk) and Glencore (GLCNF.pK)
Gladstone is a triple net lease company (they are a farmland company, but they are not actually doing the farming, companies like Dole are leasing the land) that will try to become a REIT this year. Monthly div.
Sprott Resource Corp is a lot of different things (including physical gold and public/private nat resource co's), but part is owned and leased farmland in Canada and South America.
Glencore (In Australia, Paraguay, Russia, Ukraine and Kazakhstan, Glencore farms 270,000 hectares of owned or leased land.) However, agriculture is not a large aspect of Glencore, which is the world's largest commodity trader.
Adecoagro (AGRO) is another one in South America, but exposure to Argentina has been a concern. Soros is the largest holder.
There's another one or two Brazilian ones I'm forgetting.
I do think that people should continue to look at real assets, but not just farmland or not just precious metals - there are a lot of different assets that fall under the category. The only thing with farmland is that there's little in the way of stock exposure options to farmland.
If you review FPA Cresent portfolio, there is very little that represents farmland... So not sure how this small percentage contributes meaningfully to the fund.
Romick has talked about farmland for a while. I think it came up during a chat about the growth in fund assets right around the onset of the Great Recession. Romick made a comment at that time that without a certain size, the fund couldn't gain meaningful access to certain opportunities. I believe one of those opportunities was land. FWIW.
this is like Jeremey Grantham at GMO talking about timber.. It is a great investment ( for him and GMO ) if you have $500,000 in a total net worth of $10,000,000. There are few publicly traded alternatives PCL, WOOD and the ones that exist don't work all that well and certainly do not duplicate the performance of timber in the form of trees in the ground
Reply to @Shostakovich: So, now that the fund is so large, why is the farmland portion so small? Surely, he could have purchased the same amount of farmland with smaller AUM? His logic for pushing for increased AUM seems disingenuous. Maybe the FPA folks who monitor this site can clarify.
Reply to @Sven: Maybe in the next portfolio that's released we will see some farmland. Or maybe we cannot recognize farmland or Romick's definition of it.
Oh heck, when I invest with Steve Romick I don't have time to look at his portfolio. I have looked enough. He can buy moon rocks for all I care.
Guys you are all over reacting. Ho do we know Steve Romick is not talking down the price of Gold. Don't we know others talking up the price of their holdings.
Sssshhh... Romick is waiting for price of Gold to fall to a level it is 50% (or is that 60%) below his fair valuation of Gold. Then he will buy. We'll all be rich !!!
Reply to @BWG: I've wondered the same thing with regard to size of the farmland position. I think Forbes wanted to talk up some of the unusual aspects of the portfolio (makes for good news), and that's where farmland came in.
I, too, am wary of asset bloat (in FPACX, as in all funds). In the end, however, I think FPA is a pretty good fiduciary and is more likely than many to do the right thing. And, cheer up, if the market continues a steady advance and FPACX lags, people will sell. THAT has certainly happened before to FPACX.
I live in Iowa the heart of farm country. The farm economy is great now and will be great until it is not. It just seems like a can't miss opportunity--when have we heard that before. The 1920s and the 1980s were absolutely terrible for farmers in the Midwest. True, a lot of farmers were over leveraged in the 80s and are less so today--my point is when it goes bad it really goes bad. In the 70s I knew an elderly couple living in O'Brien County Iowa whose children did not want to farm or live in rural Iowa anymore so they sold to the highest bidder usually that would be a neighbor but no it was investors from New York City and they would fly out to fly over country and have picnics on the farm eventually they sold in the 80s presumably at a huge loss. My point is they got bored, the picnics on some far off farm lost its charm. Farmland is a very looooong term investment it is not a stock that you can trade like baseball cards:)--farmers that play long ball love the big city boys coming out to buy a hobby farm because they get bored, divorce, or have so many heirs that they are forced to sell or the heirs are forced to sell because of money problems or their share of the farm is too small or impractical.
Comments
Gladstone is a triple net lease company (they are a farmland company, but they are not actually doing the farming, companies like Dole are leasing the land) that will try to become a REIT this year. Monthly div.
Sprott Resource Corp is a lot of different things (including physical gold and public/private nat resource co's), but part is owned and leased farmland in Canada and South America.
Glencore (In Australia, Paraguay, Russia, Ukraine and Kazakhstan, Glencore farms 270,000 hectares of owned or leased land.) However, agriculture is not a large aspect of Glencore, which is the world's largest commodity trader.
Adecoagro (AGRO) is another one in South America, but exposure to Argentina has been a concern. Soros is the largest holder.
There's another one or two Brazilian ones I'm forgetting.
I do think that people should continue to look at real assets, but not just farmland or not just precious metals - there are a lot of different assets that fall under the category. The only thing with farmland is that there's little in the way of stock exposure options to farmland.
BWG
Oh heck, when I invest with Steve Romick I don't have time to look at his portfolio. I have looked enough. He can buy moon rocks for all I care.
Sssshhh... Romick is waiting for price of Gold to fall to a level it is 50% (or is that 60%) below his fair valuation of Gold. Then he will buy. We'll all be rich !!!
Sorry, its Friday...
I, too, am wary of asset bloat (in FPACX, as in all funds). In the end, however, I think FPA is a pretty good fiduciary and is more likely than many to do the right thing. And, cheer up, if the market continues a steady advance and FPACX lags, people will sell. THAT has certainly happened before to FPACX.