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A Direct Investment in Water and the Food Supply

The world’s farmland is a finite resource, which must meet a vast and growing demand for food and other agricultural products. As a result, agricultural real estate has emerged as a compelling uncorrelated investment, offering the opportunity for stable income, long-term capital appreciation, and protection against inflation. Direct investment in permanent cropland—that is, properties that produce timber, wine, nuts, fruit and other commodities year after year from the same plantings, provides particularly compelling benefits including:

DIVERSIFICATION

Agricultural land provides a competitive return that is not correlated with financial assets such as stocks, bonds and other types of real estate. Since the value of land tends to increase with overall prices, agricultural investments also provide an inflation hedge, as well as capital preservation. And unlike many alternative strategies, such as hedge funds, cryptocurrency and derivatives, agricultural land is a concrete, real world investment that’s easy to understand.

SUSTAINED PERFORMANCE

In good markets and bad, farmland has generated stable, consistent returns over time, delivering value to investors even during periods of economic turmoil. Agricultural real estate outperformed financial assets during the dot.com crash of the early 2000s and the global financial crisis of 2008 and 2009 and it continues to do so during the coronavirus pandemic of 2020.

TRANSPARENCY AND ACCOUNTABILITY

These are direct investments in specific agricultural properties, a hands-on strategy that enables investors to understand in what they are investing, where it is located and who is managing the property.

Being a long-term investor means acquiring underpriced assets. We create value by the development of properties with a low cost basis per acre. The farms are efficient and low cost to operate. We use the newest varieties and high tech irrigation and farming methods. This can reduce annual operating costs. Over the long term, this gives us a margin of safety when it comes to adverse conditions due to changes in price and yields. This long-term view is the basis of our investment decisions knowing that they will pay off in the future. - Mark F. Crawford, Managing Member of Crawford Park Farming Ag

Almond Tree Orchard at Sunrise Courtesy of California Almonds, The Almond Board of California

Why Invest Now?

Supply and demand factors are driving farm prices up.

DIMINISHING SUPPLY

Expanding cities and suburbs are fast encroaching on prime agricultural land. California loses over 200,000 acres a year to urbanization.

Water is becoming more scarce and highly regulated by government. That has driven values up for properties that have access to water, particularly in water-stressed regions like California.

INCREASING CONSUMER DEMAND

As the world middle class continues to grow, the demand for nuts and fruits will grow with it. The rising trend of consumers seeking a healthy diet will increase consumer demand for nut and plant-based proteins and fresh fruit at over 5% per year.

A BUYING OPPORTUNITY

Lower commodity prices—particularly for almonds—have created buying opportunities for agricultural real estate investors in the California region. An aging farmer population is faced with larger capital requirements in an ever-challenging regulatory environment. This will continue the transition of farmland from individuals to institutions.

Why Invest With Us?

We are investing in farmland that we believe is mispriced, often because of misperceptions about water availability and quality. Water is typically the number one input cost for the farms we invest in, and assumptions about water access are often inaccurate. Our investment process analyzes both the property and its water resources. We validate the value of water rights property by property.

Farming is a very localized business, in which most properties are family-owned and concentrated in local communities. As a result, most owner-operators have no idea how properties are priced outside their immediate area. By contrast, Crawford operates throughout California, comparing water access and property values state-wide to find value. As a result, we attempt to buy properties with abundant water at a lower cost.

We also add value by developing properties, for instance, planting new varieties of trees, upgrading irrigation systems and implementing high tech farming methods that can enhance production and cost-efficiency. Through the Farm Credit cooperative system, we have access to cheap financing (currently around 3.5%) which makes it easier to weather the changes in crop prices and yields.

Our investment process analyzes hundreds of properties all over California to find the best opportunities while local farmers typically look in their respective local areas.

We look for farmland with water access—at least two functioning wells and location within an irrigation district with a sustainable aquifer.

We improve the value of farmland by applying state of the art technology that drives down operating costs and increases productivity. These enhancements include:

  • Selecting the newest, most advanced varieties for disease resistance which will out perform existing orchards and increase annual yields.
  • Choosing the best root stock for the local properties soil type and weather conditions
  • Installing high tech irrigation systems to reduce and prioritize water usage and increase the efficiency of water and fertilizer deliveries

This operational cost efficacy reduction is critical to mitigating the financial impact and price and yield volatility.

CURRENT INVESTMENTS

Crawford Park AG is a Permanent Crops focused farmland manager. We purchase existing permanent crops or land that can be developed into permanent crops. Permanent crops include almonds, pistachios, wine grapes, citrus, stone fruit, and olives.

DAVIS 190 LLC

190 acres of almond trees near Davis, CA planted 2012. 50% Nonpareil, 25% Carmel and 25% Wood Colony.

Total Investment

$9,450,000

Avg Cash Yield:

7%

IRR 10YR

14.3%

ALMONDS+ LLC

78 acres of almond trees in Lindsay, CA planted 2016-18. 50% Nonpareil and 50% Monterey.

Total Investment

$4,345,000

Avg Cash Yield:

10.1%

IRR 10YR

11.9%

MIDDLE RIVER ALMOND RANCH, LLC

160 acres of flat farmland near Stockton, CA. Almond trees will be planted in Spring of 2021.

Total Investment

$4,901,000

Avg Cash Yield:

7%

IRR 10YR

10.5%

ROBERTS ISLAND ALMONDS, LLC

157 acres of flat farmland near Stockton, CA. Almond trees will be planted in Fall of 2021.

Total Investment

$4,626,000

Avg Cash Yield:

9.2%

IRR 10YR

10.0%

Track Record

Crawford Park manages:

over
$29M
of farmland assets

 

for
250
investors

 

over
650
acres of land

We care for:

over
150,000
trees

LEADERSHIP

Partners

Professional Farm Managers

North

Joe Martinez

Central

Gino Torlai

South

Josh Patigliano

Plant Science Advisors

North

Central and South

Processing and Marketing

Financial

Conterra

Contact

Mark Crawford
Crawford Park Farming AG
9301 Wilshire Blvd, Suite #506
Beverly Hills, CA 90210

310.273.3333
mark@cpfag.com