Capital Allocators – Inside the Institutional Investment Industry Jay Girotto – Farmland Opportunity (First Meeting, EP.10)
Oct 14, 2019
Jay Girotto, President of Farmland Opportunity, transitions from software engineering to farming investments. He discusses the unique advantages of investing in U.S. farmland, such as uncorrelated returns and inflation hedging. Jay shares insights on managing investments with a strategic regional focus and operational partnerships. He also elaborates on evaluating soil quality and navigating risks like regulatory changes and market fluctuations. Throughout, he emphasizes the importance of leveraging local relationships for optimizing returns.
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Farmland Market Inefficiency
- Farmland is an inefficient market, especially north of the Mason-Dixon line, due to fractured ownership from the Homestead Act.
- This inefficiency creates opportunities to buy land below market value.
Iowa Land Ownership Example
- Jay Girotto explains that in Iowa, one county with 300,000 acres of farmland can have over 3,000 owners.
- This fragmentation allows for discounted purchases due to non-economic reasons like avoiding local politics or needing a quick sale.
Evaluating Farmland
- Assess soil quality using state-specific rating systems, but understand their nuances.
- Consider factors like fertilizer history, drainage, and avoiding risky locations.