Farmland Investment Up North
The Globe and Mail is a Canadian National Newspaper and yesterday, they published an article (a fee is required to fully read the article) on Bonnefield, Inc. which is Canada’s largest farmland investment manager and property management firm. According to their website, the firm is dedicated to preserving “farmland for farming” across Canada.
One of the early features of the company was its goal to provide financing to farmers to allow them the capital needed to farm additional land or provide for succession. Early on, most of their investments dealt with sale-leasebacks by the farmer. After the sale, the firm would sign a 10 year lease with the farmer. At the end of the lease, the farmer could renew the lease or repurchase the farmland.
In today’s environment of high land values and low crop returns, we may see more of this active management in the US. I know of several firms that are already doing this and we believe that this trend will continue.
As a business, owning your farmland may not be the best solution. As long as you control the asset, it may make more sense for someone else to own it.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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