Article re Church's Purchase of Agricultural Land

[smac97]

Nearly 42,000 Acres of Farmland Sold to Mormon Church for $289 Million

This article is interesting because, unlike similar articles about the Church purchasing land, this one explains some the particulars as to why such sales are happening.

Quote

In October 2024, a sale of 41,554 acres of farmland across a portfolio of 46 farms was sold by Farmland Partners Inc. to Farmland Reserve, Inc., an entity of The Church of Jesus Christ of Latter-day Saints, for $289 million. 

Farmland Partners Inc. is an internally managed real estate company that owns more than 140,000 acres of farmland across 15 states and makes loans to farmers secured by farm real estate. The company went public in 2014, and has since purchased more than 300 farms through various transactions with other investors, landlords, and farmers.

Paul Pittman, the executive chairman for Farmland Partners Inc., said the recent sale included multiple tracts of land across eight states, including Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, North Carolina, and South Carolina. The acres sold were predominantly grain farms, as well as soybean and cotton farms, Pittman said.

 

When asked how this sale might impact local farmers, Pittman said the sale helps bring “another high-quality investor in the local region.” 

While Pittman acknowledged concerns that farmers and ranchers might have regarding the sale of the nearly 42,000 acres of farmland and the impacts it might have on local communities, he said this sale doesn’t change things locally in a meaningful way. In fact, he said that it’s just the transfer of land from one remote non-farmer owner to another. This is because Farmland Reserve has already made the commitment to maintain the same farmer tenants who are currently on the land, Pittman said. 

I hope the Church is both a good steward of its investments, and also a good "non-farmer owner" to its tenant farmers.

Quote

Federal Laws Restrict Farmland Partners’ Ability to Make Multiple Sales

The sale was also managed as one larger sale due to federal laws, Pittman said. Farmland Partners is considered a real estate investment trust (REIT), a company that owns, finances or manages properties and then is required to pay most of that income to investors. As an REIT, Farmland Partners is bound by tax code IRC § 1033, which limits them to selling no more than seven properties in one calendar year.

Pittman said this creates challenges for Farmland Partners when it comes to selling tracts of land to individual farmers. In 2023, Pittman said some of their sales of farmland were made to individual farmers. “We’re happy to have a farmer buy a farm from us,” Pittman said, “but we’re really restrained by federal law.”

This means that, should Farmland Partners wish to have sold the 46 individual farms that made up the portfolio sale to Farmland Reserve, the tax code would have prevented them from making more than seven individual sales.

Huh.  So federal law impairs the ability for farmers to buy land.  Bummer.  I hope this can change.

Quote

Tenant Reaction

Despite the change in land ownership, Pittman said Farmland Reserve met and interviewed all the farmer tenants on the sold land before the sale. He said they were aware of the transaction and supported it. 

Doug Rose, CEO of Farmland Reserve, said Farmland Reserve is an investor with a long-term vision, and they “look forward to leasing these productive farms to local farmers for many years to come.”

So it sounds like the farmers are on board.  I'm glad to hear that.

Thanks,

-Smac

[Dario_M]

That is a big price.