Making Markets

Brandon Zick: Harvesting Alpha Through Farmland - [Making Markets, EP.7]

Dec 8, 2023

Brandon Zick, CIO of Ceres Partners, discusses the dynamics of investing in farmland, supply and demand, and how Ceres chooses farms to invest in. They also explore the economics of farming, bankruptcy risks, and the niche sector of farm funds.

01:10:09

Creator website

Episode guests

Brandon Zick

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Episode notes

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Quick takeaways

Farmland ownership in the US is not consolidated, with only 40-45% owned by active farmers.

The process of finding and acquiring farmland involves public auctions, private transactions, and discussions with landowners and tenants.

Investing in farmland is seen as a real asset that generates income, with row crops considered lower risk and livestock carrying higher risk.

Deep dives

Growing up on a farm and the value of land ownership

The guest, Brandon Zick, shares his experience growing up on a dairy farm and the hard work it entailed. He discusses the value of owning land and the optionality that comes with it, using his family's farm as an example. He highlights how the profitability of owning land can change over time, such as his family's farm becoming more profitable from natural gas extraction than from dairy farming.

Structure, Income Distribution, and Investment Strategy in Farmland Investment

03:23

Growing Up on a Dairy Farm and Farmland Ownership in the US

03:32

Challenges of Irrigated Farmlands and Water Resources in California

01:25

Low Risk and High Return Crops in the Midwest US

02:29

Introduction

2min

Farmland Ownership in the United States: Myths and Realities

25min

The Relationship Between Farmers and Inflation

2min

Investing in Farmland: Origins and Growth

6min

Low Risk and High Return Crops in the Midwest US

2min

Buying Farmland

29min

Analyzing the State of the Agricultural Market Cycle

3min

Today's guest is Brandon Zick, the CIO of Ceres Partners. Brandon grew up on a farm and then worked in finance for a decade. In 2010, he returned to his agrarian roots at Ceres, where he manages a $1.4 Billion fund that invests in farmland.

In this episode, Brandon gives us an in-depth look at this unusual asset class, including the supply and demand dynamics, the economics of farming, and how Ceres chooses which farms to invest in. Please enjoy this conversation with Brandon Zick.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:02:05) - (First question) - Appreciating the benefits of a farm upbringing

(00:03:26) - Segmenting farmland across the United States

(00:09:04) - Locating farms on the market

(00:11:39) - Realizing profits from farm ownership

(00:15:57) - Assessing the farmer population

(00:18:57) - Confronting bankruptcy risks in farming

(00:25:01) - Comparing operational and sales expenses

(00:30:41) - Exploring the niche sector of farm funds

(00:32:36) - The particulars of livestock investments

(00:35:41) - Identifying crops with the lowest returns

(00:38:08) - Navigating the farm acquisition process

(00:47:12) - Strategies for risk diversification in agriculture

(00:50:23) - Understanding turnover in the farming sector

(00:54:36) - The economics of crop monetization

(01:02:26) - Highlighting his most favored deal

(01:04:42) - Effects of low interest rates on the agricultural market

(01:07:23) - Analyzing the current phase of the market cycle

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Making Markets

Brandon Zick: Harvesting Alpha Through Farmland - [Making Markets, EP.7]

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Growing up on a farm and the value of land ownership

Ownership and consolidation of farmland in the US

The dynamics of sourcing and renting farmland

Investing in Farmland as a Real Asset

The Unique Approach of Sears Farms

Structure, Income Distribution, and Investment Strategy in Farmland Investment

Growing Up on a Dairy Farm and Farmland Ownership in the US

Challenges of Irrigated Farmlands and Water Resources in California

Low Risk and High Return Crops in the Midwest US

Remember Everything You Learn from Podcasts