September 1, 2020

By Lynda Kiernan, Global AgInvesting Media

Gladstone Land’s latest deal brings the investor into a new U.S. region for the company with the announcement of the acquisition of 939 gross acres of farmland in Maryland’s Eastern Shore and Delaware for approximately $7.4 million. 

The land will be used to grow vegetables and sod, and in connection with the deal, Gladstone has entered into a 10-year lease with a large-scale vegetable and sod grower to manage the property.

“The access to major cities and abundant water sources makes farms in this region extremely attractive,” said Joseph Van Wingerden, director (real estate), Gladstone Land.

“We are very excited about this opportunity to enter into a new region and partner with a great and diversified local grower,” Wingerden continued,  “We hope to continue to expand in the mid-Atlantic region and offer local farmers a chance to grow their acreage.”

This deal now expands Gladstone’s footprint into 12 U.S. states ranging across 25 growing regions. And David Gladstone, president and CEO of Gladstone Land, stated that the Mid-Atlantic region is an attractive farmland market as it offers not only new opportunities to grow high-value crops such as potatoes, peppers, and sod, but to also diversify the company’s portfolio of holdings.

Since its founding in 1997, Gladstone has grown this portfolio to 116 farms totaling 90,000 acres, that are currently carrying a value of $919 million. The bulk of these farms are located in regions where tenant farmers grow fresh produce annual row crops such as berries and vegetables. However, the company also owns farmland in permanent crop production, growing almonds, olives, figs, pistachios, blueberries, and other orchards and vineyards.

With such a diversified portfolio of properties spread across a range of varying U.S. geographies and climactic themes, Gladstone must constantly monitor its holdings to assess ongoing risks.

News recently broke that strings of wildfires sparked by lightning strikes have been destroying farmland, crops, and infrastructure across the farming regions of Northern California. 

The resulting wildfire has grown to be ranked as the second largest in state history, having burned 1.1 million acres, and killing seven, as of Monday, August 24. It has caused mass evacuations and has stopped the 2020 Sonoma County grape harvest as roads were closed and terrible air quality made working outdoors impossible. 

With holdings in the state, Gladstone made an announcement that none of its farms have been damaged by the fires, nor does it expect that they will be damaged in the future through the event.

“As most of you know, our farms are largely in the valleys and flatlands, while most of the fires are in the mountains. Our thoughts are with those who have been injured or have lost possessions because of the fires,” said Gladstone.

Threats, however, are not only ecological. Investment managers must also be vigilant on how COVID-19 is affecting their labor force and supply chains.

“Our farms remain 100 percent occupied,” said Gladstone, “…and our farmers continue to take advantage of elevated pricing for fresh produce and certain other foods at grocery stores.  The fallout from COVID-19 has not negatively affected the majority of our farmers in any significant way.”

“There is still an oversupply of corn, wheat, and soy, which continues to drive depressed prices for those crops.  We only have a few farms growing these types of crops, making up less than 10% of our total revenue, and a significant portion of that is organic.”

 
– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.