Farmland LP is Demonstrating How Converting Farmland to Organic Can be a Very Profitable and Beneficial Endeavor

Farmland LP is Demonstrating How Converting Farmland to Organic Can be a Very Profitable and Beneficial Endeavor

Far too often, people are bombarded with the narrative that organic farming has much lower yields and is just not economically viable, leading them to conclude that growing GMOs is the only option.

Craig Wichner will tell you otherwise.

“We have demonstrated that sustainable agriculture is more profitable than chemically-dependent, conventional agriculture,” said the CEO of Farmland LP, an investment fund that converts conventional farmland to regenerative organic. “All of our land for organic vegetables is fully leased out, and even though we just increased the rent on our farmland from $700 to $750 per acre, our farmers have asked for longer leases, and we are oversubscribed. We need to buy more land to convert to organic because the demand is so great. This wouldn’t be happening if our farmers weren’t making money.”

Critical to Farmland LP’s success is that everything is done with the goal of maximizing the productivity of the soil. This means planting four different crops on the land per year and having a planned rotation of animals, vegetables, fruits and grains.

This approach would be quite challenging if you were one farmer on one fixed piece of land, not to mention all of the different equipment that would be required.

Yet, since Farmand LP controls 15,000 acres throughout California and Oregon, it can move farmers in and out of different farms, empowering them to be as successful as possible.

“We are doing multi-tenant commercial real estate on farmland and are replacing commodity crops with specialty and permanent crops, like grapes and blueberries, that command higher prices. This long-term crop rotation increases soil fertility, productivity and resilience,” said Craig Wichner. “When conventional farmers try to do organic and say that it doesn’t work, they are utilizing conventional techniques. For organic to work, you have to do crop rotation and rehabilitate the soil.”

Farmland LP, which has $200M of farmland under management, knows that its approach is successful, having delivered 10% annualized returns with 1/3rd leverage.

With this track record and ability to attract patient investors, it is afforded the opportunity to put its farms through the three-year USDA organic conversion process and also identify the ideal crop rotation over the next 10 years.

For Craig Wichner, the motivation behind this fund is clear.

When his daughter was born, he believed that today’s generation is leaving behind a planet in difficult shape and that he was going to dedicate his life to allow for her dreams to come true. And he asked himself what he was doing to make a difference, something that he spent two years exploring.

With the fund, not only is he increasing organic farmland in the U.S., but he is taking square aim at the millions of acres of GMO corn and soy that are planted each year.

“Monocroppping is incredibly harmful to current and future generations. It poisons the water supply from the pesticides, destroys pollinators and decimates ecosystems in the Midwest. And it’s all subsidized by taxpayers,” put forth the fund’s CEO.

Thanks to a grant from the USDA’s Natural Resource Conservation Service, Farmland LP was able to quantify the ecological benefits of its sustainable agriculture practices using Ecosystem Service Valuation and Greenhouse Gas accounting models on a field-by-field basis.

Its first fund generated $12.9 million in ecosystem service value since inception — a significant benefit that accrues to the surrounding communities and environment. Under conventional management practices, these same farms would have caused $8.5 million in ecosystem harm since inception, resulting in a total $21.4 net ecosystem service value benefit as compared to conventional practices.

This benefit was generated on $85 million of farmland and is on top of the 67% net financial gain in the fund — a true double-bottom line investment return.

Farmland LP allows individuals and institutions to invest in the conversion of farmland to organic, an incredibly important endeavor for our industry, especially since we are forced to rely on imports for the majority of our organic food needs.

Yet, there is a critical lesson in how this fund operates.

By taking a holistic approach of having land management and organic farming work separately but in unison — all with the shared goal of maximizing soil productivity — it can achieve the best possible result.

“Soil biology is fundamental to making the world a better place, for both increased profits and impact,” said Craig Wichner.

Pinot Noir grapes, shown nearly ripe, at Massey Wells Farm near Buena Vista, OR.

Frank Savage, Farm Manager, showing the cattle on pasture at Burns Farm near Tracy, CA.

Organic tomatoes are ready for harvest in late August at Brentwood Creek Farm in California.

An organic annual ryegrass crop vigorously sprouting near Corvallis, OR.

At Brentwood Creek Farm, the farm crew is planting 2,700 ft of native hedgerows to promote native pollinators.

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