Farmer by Farmer, Investor by Investor, Regenerating America’s Farmland
In northern Montana, Doug and Anna Jones-Crabtree restore soil health while growing organic heirloom and specialty grains, pulse and oilseed crops on 4,700 acres. A thousand miles away in Central Minnesota, the Main Street Project sequesters carbon as it transforms 100 acres of bare ground to a permaculture farm alive with hazelnut trees and foraging chickens.
These two farms are dramatically different, but both are part of Iroquois Valley Farms’ quickly expanding network of farmers who are growing healthy food and stewarding the land. They and our 40 other farms around the country are proving to investors that the biggest “regenerative” investment opportunity in the world is to move away from the dead soil monoculture toward ecological-driven organic operations and that the solution is supporting organic farming agri-preneurs.
Iroquois Valley Farms starts with the farmers, who choose the land that they need to run profitable farms on. Our company purchases the land and rents it to the farmers (they can buy it from us later if they chose) or we provide financing so that the farmers can hold title. Eighty percent of our farmland investment portfolio is owned farmland; 20 percent is mortgage assets. Our company takes advantage of the appreciation of farmland over the years, plus a steady supply of income from rental and mortgage payments. In a sense, we focus on both growth and income for our investors.
We are purposefully structured to allow broad-based ownership, so that the smaller investor can both diversify into organic farmland and support the production of healthy food on living soils. Our 300-plus investors are individuals, family offices, foundations, faith-based investors and more. We are excited to be reaching the growing number of millennial investors as well.
Our company has a pipeline of farmers nationwide who want our help. You can make this happen in two ways:
• Equity Shares in our Real Estate Investment Trust (we moved from an LLC format to a REIT this year). The target distribution yield is 2-3 percent. Redemption rights are available after seven years, allowing for returns driven by asset appreciation.
• Soil Restoration Notes™, a three-year fixed income security that pays 1.5 percent per annum semi-annually. We use a portion of the Soil Restoration Note™ proceeds to help our farmers restore conventional degraded farmland to organic health. We know that the faster they make that transition, the more quickly they restore their soils, sequester carbon and return profits to themselves and the company.
Here’s what makes this 10-year-old company the leader:
• Iroquois Valley Farms is fiercely focused on farmers: Our farmers — most from multi-generational farm families — make their own business decisions and run their own operations. We support farmers as entrepreneurs; we are not asking them to be laborers in someone else’s farmland investment business plan. We help them through their challenges so that they will thrive. All of us need them to stay on the land — they are the innovators (researchers call them “early adopters”) whom other farmers look to become better stewards.
• Because of our farmer-focus, we are in this for the long term—for, as the Iroquois Nation says, the next seven generations. We are NOT a farmland trading company. Our model is not the quick fix, quick profit thinking that got us stuck in the dead zone monoculture that is the current ag industry standard. We provide family farmers the land security that will help them regenerate soils, rebuild communities, and continue to pass on their family farms to their farming children.
• Millennials are our stars. In a country of rapidly aging farmers, we are proud to report more than 70 percent of our tenants are millennials. We are eager to help more. There is no shortage of young farmers who want to make this world a better place, and they deserve secure land tenure. Yet these young people report that a lack of land access and capital are their top two challenges, according to the National Young Farmers Coalition.
• We thrive on diversity. Our farmers grow nuts, berries, beans, corn, hay, wheat, rye and more; they milk cows and raise beef cattle, chickens, hogs, and ducks. They farm from Maine to Montana and many places in between. With the addition of the Main Street Project to the Iroquois fold, we have begun adding ethnic diversity to our portfolio as well, as the Main Street Project serves Latino farmers. Diversity is our strength and a good investment as well. Our farmers’ varied enterprises, locations and farming systems mean we “don’t have all of our eggs in one basket,” which is particularly important given the severe climatic events we are all experiencing.
Iroquois Valley Farms is perfectly positioned to respond to a number of major trends over the next 25 years:
• There is a massive turnover of farmland occurring. Farmland owners are expected to transfer 91 million acres in the next five years (another 57 million acres will be included in landowners’ wills), according to the U.S. Department of Agriculture. Much of this land will be transferred within families, but when the land does come on the market, it will be sold quickly. Small and mid-sized farmers need the resources and agility of Iroquois Valley Farms to help them get – and stay on – the farm.
• Organics is the fastest growing sector of the U.S. food industry, according to the Organic Trade Association; as companies like General Mills will attest, they simply cannot get enough raw product to serve their consumers’ demands for healthy food. Millennials are driving that change in habits—more than 50 percent incorporate organic foods in their diet, according to the Organic Trade Association. Iroquois Valley Farms is helping meet that demand, which will only grow as these values-focused young people age.
• We have left ourselves and the next generation a climate change challenge we are just beginning to understand. Iroquois Valley Farms isn’t waiting for the federal government leadership on this most serious of issues. Our farmers are working creatively in so many different ways to sequester carbon—from pasture-based systems, to extended rotations of crops, to permaculture crops like hazelnuts. These farmers don’t have a choice if they want to save their soils—they are on the front lines of intense rains and lingering drought.
• And finally, a most hopeful trend: Impact investors and so many others are acting quickly and effectively to protect the future of our planet. The success and projected growth for Iroquois Valley Farms proves that many of us aren’t putting up any longer with the industrial agriculture system that results in fewer and larger farms, disdains farmers and their livelihood, and treats our soils and water as expendable. We are a movement that will not be stopped.
For more information, visit www.iroquoisvalleyfarms.com or call Alex Mackay, Director of Business Development and Investor Relations, firstname.lastname@example.org
Article by Teresa Opheim, Board Manager of Iroquois Valley Farms and manager of a USDA Natural Resources Conservation Service Conservation Innovation Grant, which supports the development of the Soil Restoration Notes™. She is the former Executive Director of Practical Farmers of Iowa, editor of the book The Future of Family Farms and author of Your Farmland and the Future: Setting Goals, Taking Action.