Bill Gates owns more land than
all of the entire city of New York. Jeff Bezos's land is
double the amount clocking in at 420,000 acres. John Malone, the
largest private landowner in America, owns 2.2 million acres
all by himself — a landmass slightly smaller than the island
of Puerto Rico. America is enormous, yet 100 of the richest
and largest private landowners in America own 1.86% of all the
land available in the United States, the majority of their
land being forests, ranches, and farmland, Some people like myself find
farms beautiful and peaceful and nice place to live. Land is only getting more
valuable. In the mid 1990s, farmland was valued at less than
$1,500 an acre adjusted for inflation. By 2020, that number
had grown to $3,160 an acre. It's expensive. So if somebody
is desiring land, it is primarily people of wealth who can afford it. Institutional
capital is growing and it's becoming a bigger piece of the
market. It's about a $3 trillion asset class when you look at the
whole U.S. However, not everyone is
benefiting from the rise in farmland prices, It's going to continue to be
harder for farmers, for beginning farmers like myself,
if prices continue to go up. Everything's going up. Land is critical. And it's it's the
center of how we survive and persist as communities and as
people and farmland in the US is something that we don't think
about that often. So why are the ultra wealthy
investing in farmland? And what impact will it have on the
agricultural industry? In 2020, Bill Gates made headlines for
becoming the largest private farmland owner in the U.S. He
had accumulated more than 269,000 acres of farmland across
18 states in less than a decade, shielding is purchased by buying
up land through shell companies. Why? It's a good economic
investment. Land has always been something
that the ultra wealthy, people of real means have have desired.
It has great intrinsic value. Beyond that, it is a limited
resource. They're not creating any more of it. And in fact,
quite the opposite. We lose farmland all the time. In the
United States, we're losing farmland at a rate of about
2,000 acres a day. It is not only more and more important
over time, but we have less and less of it. So it's an asset
with increasing value. Farmland values began rising in
1988. And except for the single year declines in 2009 and 2016,
values have seen a steady increase over the years. In the
mid 1990s. farmland was valued at less than $1500 an acre. By
2020, that number had grown to $3,160 an acre. It's not correlated with the
stock market and other major asset classes and so people like
that diversification and it's been a very stable performer. If
you go back to COVID when the stock market, you know, lost 10,
20, 30, 40% at the beginning of COVID, you don't wake up and fin
out that your farmlands worth 5 cents on the dollar the next da Bill Gates is not the only one
eyeing this investment. In 2011, the top 100 largest private
landowners owned about 32.7 million acres of land across the
United States. Today, that number has grown to over 42 .1
million acres, roughly th e size of Florida and Connecticut
combined. His farmland grows onions, carrots and even
potatoes that are used to make McDonald's french fries. Thomas
Peter five is the 17th largest private landowner in the US
owning 581,000 acres. The reason I own lands in the
Midwest is because these are agricultural lands, right? And
that's where the farms are, right? I'm not farming in
Boston. If someone is really interested
in acquiring a piece of land and with farmers, once you own one
parcel, you often want to own the parcels that are adjacent to
it. So if you can make those purchases quietly, it might be a
far more successful way to make those purchases economically. They are not one large
transaction there are several smaller pieces, and they were
usually purchased at auction. The vast majority of the land
held by the largest private landowners are forest, ranches,
and farmlands located in states west of the Mississippi River
with few exceptions like Maine and Florida. When we think about farmland, we
think about the Midwest being, you know, the most fertile, most
valuable farmland in the world. And I liken it to being the
Manhattan of farmland when you look at Iowa, Illinois, those
types of regions. But then when you look at California,
California and the Pacific Northwest, up in Washington and
Oregon and the Mississippi Delta, those are some other
major regions that you'll see a lot of that major capital
playing and that's where the agricultural productivity is. Today, the US Department of
Agriculture estimates that 30% of all farmland is owned by
landlords who don't farm themselves. Buyers often
purchase land from farmers who have owned it for decades. Many
of whom are asset rich, but maybe cash poor. The way the market works is the
land transitions primarily to the people who will pay the most
money for it. So a lot of farmland gets purchased by
non-farmers. I think many farmers would like
to see their land remain in agricultural production, would
like to sell it to another farmer. But the economic
realities for them are typically that they've spent their life
farming. Their retirement, their equity is all in the land and
tied up in selling land. Institutional capital is growing
and it's becoming a bigger piece of the market. And it is part of
that wealth transfer that's happening when you look at the
demographics behind who owns farmland. A profit can also be made by
utilizing the land in numerous ways. Approximately 39% of the
911 million acres of farmland across the US is rented out to
farmers, and 80% of that rented farmland is owned by landlords
who don't farm themselves. For a lot of non-farmers who
purchase property, they may then hire somebody to farm the
property for them. They may lease the property to be farmed
by others. And leasing is actually often a very good
strategy for farmers if it's a well structured lease. What
we're seeing right now on Midwest cropland cap rates, it's close to two and a half right
now. And so you go buy a farm and you put that cash rental
lease in place, you're going to be looking at about 2.5 percent
return on your capital. In some cases, there are tax
incentives that incentivize landowners to have farming
occurring on their land. And that is giving them a tax break
for essentially for the work that the farmers who are leasing
from them are doing. But it can in some cases, mean that t
e farmers get a break on the lea e price as well. The involveme
t of private landowners has had a significant impact on farmers
n the United States. Some argue n its support, suggesting that t
e process of leasing farmlands h s given new opportunities f
r farmers who wouldn't normally e able to afford to far One of the biggest barriers for
incoming farmers is the high cost of farmland. And one way
around that is if you can have a good lease agreement with a
landowner, you can farm successfully without having that
initial outlay of cost. Young farmers are just as happy
to lease the land because whether you are young or old,
it's a business, right? The business of farming is becoming
more and more specialized. There are the people who concern
themselves with what to plant. There are the people who do the
planting, to own the machines, and work the machines. And then
there are the people that market the produce. So efficient
farming is not one person that's doing the whole thing. Those who are against the idea
worry that new farmers can't compete with the likes of Bill
Gates when it comes to acquiring land. People are swooping in that
don't even live in this community and land grabbing.
They can live in California and be able to purchase property
here in our city just like that. But somebody that lives here,
that works here, that cuts the grass next door because that lot
hasn't been cut in a year, that picks up the trash on the
streets. They attempt to purchase property and they have
to go through hoops and hoops and hoops. With increasing competition on
land and increasing values of land, it really puts farmers in
a challenging position because they are not competing against
individuals with the same income as them. I pursued the purchase of a 10
acre farm here a year ago this month. And the owners ask for
$1.75 million right for the property in Kentucky. $1.75
million for 10 acres. I couldn't afford that, you know, but a
developer swoops right in and is able to take that offer, you
know, that opportunity right out from under me, because they
could. And while leasing might sound
like a good idea on paper, it often puts farmers in a tricky
spot. The problem with leasing is that
it really doesn't give farmers the long-term security that they
need to invest in their business. If someone is saying,
well, we're going to sell the land, now, you have the option
to stay or you could leave, that can put farmers in a really
tricky spot. In some areas, the engagement of
private landowners has also led to soaring housing prices and
cost of living. When you look at these rural
communities. There's definitely winners and losers in terms of
various parts of the country. When you get into the
Mississippi Delta, for instance, where they've lost a lot of the
tobacco industry or the cotton industry that has evolved
through the years, you've seen some of these towns really
struggle and they've lost their industry and that's created a
lot of poverty in some areas of agriculture. The jury is out on whether
private landowners are a force for good or bad for agriculture.
But more farmland is expected to make its way to the market in
the future. When you look at the demographics around
who owns land, it's impractical to think that farmers are going
to buy every acre that transitions over the next 20
years. We think in some form or fashion, about 50% of the
farmland in the US will turn over over the next 25 years. With this time, I would say that
the jury is out on whether or not large purchases by the ultra
wealthy is a good or a bad thing. But I honestly do believe
that having large landowners with the ability to look long
term at the land and do what's right by the land, and maybe be
in a position to say lease the land to incoming farmers at
affordable rates, that could all be positive. And so I'm hopeful
it can be that. There are fewer and fewer
farmers with every US Ag Census and there are a slight increase
in the number of young farmers but really at this point not
enough to replace the farmers who are leaving the industry. So
we need more young farmers and we really need to support them
by making access to land possible.
Time to play the good old game of who's gonna starve? It could be America's new hit game show.
I dont understand how free market fucks don't understand that this is literally going to cause a massive reduction in freedom
It isn't that they are investigating in farmland, they just have so much money that they own everything.