The Lemon Fool

Is there an investment trust that focuses on uk farms and farmland, and actual food production?

Farming in the UK has mostly been a fairly dreadful business to be in. Family farms that already own land that would cost a fortune to buy seem to struggle to survive.

Specialist food companies like Cranswick have done much better.

Relief from IHT has distorted the value of farmland:

Wealthy investors are hoovering up agricultural land in order to avoid inheritance tax, pushing prices to record highs, and forcing out farmers. The average value of arable land in England has surged 15pc year-on-year to a record high of £10,800 per acre, according to a recent report from estate agents Strutt & Parker...Mr Uys said land prices are soaring because of increased competition from private investors, which has made it far harder in recent years for farmers to purchase rural plots big enough for commercial farming.

“Professional farmers are getting priced out by people buying land because they want the IHT relief,” he said.

A third of all farms sold last year were bought by private and institutional investors – the highest level for over a decade.

https://www.telegraph.co.uk/money/tax/inheritance/inheritance-tax-loophole-farm-buyers-rural-britain/

RC

yyuryyub wrote:Farming in the UK has mostly been a fairly dreadful business to be in. Family farms that already own land that would cost a fortune to buy seem to struggle to survive.

Specialist food companies like Cranswick have done much better.

My perception too. The political interference in farming makes the house builders look positively free of it!

I think the farm-owning families carry on in quiet desperation hoping to hit the occasional jackpot of a bit of their farmland at £10k an acre suddenly becoming building land at £1m an acre. Or something like that. Just my totally uninformed opinion though.

Mike4 wrote:

yyuryyub wrote:Farming in the UK has mostly been a fairly dreadful business to be in. Family farms that already own land that would cost a fortune to buy seem to struggle to survive.

Specialist food companies like Cranswick have done much better.

My perception too. The political interference in farming makes the house builders look positively free of it!

I think the farm-owning families carry on in quiet desperation hoping to hit the occasional jackpot of a bit of their farmland at £10k an acre suddenly becoming building land at £1m an acre. Or something like that. Just my totally uninformed opinion though.

Not totally uninformed. The village where I grew up and where my mum still lives has had farmers falling over themselves to offer land for development. The fact that the village, the school and infrastructure are not equipped for vast new housing estates and thousands of new people seems to be quietly ignored. Despite strong local opposition, all plans seem to make it through the planning stages. I just wonder how many brown envelopes were handed around under tables!!

Re. Farming ITs, there are some in the USA:

Farmland Partners FPI.NYSE, Gladstone Land Corp LAND.NASDAQ.

Steve

Disclaimer: I hold a small amount of FPI.

I don't know, but there some agriculture-focussed funds. I have a distant memory of H-L pushing something in the sector when I first signed up, and I guess they'd be somewhere to look. From memory, they'd get you a mix of land&production, agtech, agriservices, whatever, though I expect things have evolved since then.

stevensfo wrote:Not totally uninformed. The village where I grew up and where my mum still lives has had farmers falling over themselves to offer land for development. The fact that the village, the school and infrastructure are not equipped for vast new housing estates and thousands of new people seems to be quietly ignored.

It's rather off topic, but the point is that such infrastructure CAN be built at the same time as the houses. You never know, you might even get sewerage works that don't pump directly into the local river.

If you are interested in historical housing developments can I recommend looking at Warrington New town.
https://daysofthenewtown.wordpress.com/

Back to the subject. As said, I'm not aware of any such funds, it's a relatively unpopular investment theme. What exists are companies, usually global in nature, that work in the area. I don't have any shares in Cranswick, Carrs milling or Genus, but have followed them over the years.

Here is a somewhat radical suggestion. If you can't find an IT, why not build your own out of quoted shares?

When I controlled my children's JISA's I did buy ABF (Associated British Foods) for the daughter. Ok it was to interest her in investment and she was more interested in the high street shops that they own, than food. Didn't stop me winding her up about the price of sugar though.

Thank you all for your thoughts and observations, my interest was that with both the price of food and land going up one could perhaps expect to do well.
I have looked at carrs and ABF over the years but for reasons I don’t now remember, did nothing.

G3lc wrote:Thank you all for your thoughts and observations, my interest was that with both the price of food and land going up one could perhaps expect to do well.
I have looked at carrs and ABF over the years but for reasons I don’t now remember, did nothing.

I too looked at Carr's Milling in the early 2000's and did nothing. I remember that they ticked all the boxes at the time with the exception of capitalisation. Too bad, they seem to have done well over the years since although I haven't looked at them for a while.

john

Not UK, but listed in US and full of South American farmland and agricultural production, nice dividend too

CRESY/Cresud S.A.C.I.F

https://www.cresud.com.ar/index.php?lng=en

ReformedCharacter wrote:Relief from IHT has distorted the value of farmland:

Jeremy Clarkson has made a popular TV series out of the difficulties in farming for a profit. But wasn't his ownership of a farm originally motivated by IHT considerations?

You could look at MP Evans (https://www.mpevans.co.uk/, a 150-year old UK-based palm oil plantation company investing in Indonesian plantations. Since palm oil is the world's favourite oil, essential to feed much of the world's population and replace petroleum in personal care products, it has a bright future. MPE is also on the AIM market, so free of IHT after 2 years. As most of its palm trees are relatively young, production is steadily increasing and dividends and earnings are rising.

UncleEbenezer wrote:I don't know, but there some agriculture-focussed funds. I have a distant memory of H-L pushing something in the sector when I first signed up, and I guess they'd be somewhere to look. From memory, they'd get you a mix of land&production, agtech, agriservices, whatever, though I expect things have evolved since then.

There is a US-listed ETF that invests in agricultural shares, with the ticker symbol MOO. Amongst its major holdings are Ag names like Corteva, Bayer and Zoetis.

You can play the sector by investing in shares of fertiliser companies. Mosaic (MOS) and Nutrien (NTR) are major North American shares in that sector.

For farmland there is a REIT - Farmland Partners (FPI).

Then there is Archer-Daniels Midland (ADM) which is a major producer and miller of grains, including flour and corn.

Finally a fun idea is Darling Ingredients (DAR), that is a large animal rendering company that produces farm animal byproducts.

Lootman wrote:
There is a US-listed ETF that invests in agricultural shares, with the ticker symbol MOO.

I wonder if there's an IT or ETF consisting of sewage-management companies, and how brave they might be with their ticker-request form...

Cheers,

Itsallaguess

Itsallaguess wrote:

Lootman wrote:
There is a US-listed ETF that invests in agricultural shares, with the ticker symbol MOO.

I wonder if there's an IT or ETF consisting of sewage-management companies, and how brave they might be with their ticker-request form...

Cheers,

Itsallaguess

I don't think "LOO" is particularly daring. Oh, I see...

Lootman wrote:

UncleEbenezer wrote:I don't know, but there some agriculture-focussed funds. I have a distant memory of H-L pushing something in the sector when I first signed up, and I guess they'd be somewhere to look. From memory, they'd get you a mix of land&production, agtech, agriservices, whatever, though I expect things have evolved since then.

There is a US-listed ETF that invests in agricultural shares, with the ticker symbol MOO. Amongst its major holdings are Ag names like Corteva, Bayer and Zoetis.

You can play the sector by investing in shares of fertiliser companies. Mosaic (MOS) and Nutrien (NTR) are major North American shares in that sector.

For farmland there is a REIT - Farmland Partners (FPI).

Then there is Archer-Daniels Midland (ADM) which is a major producer and miller of grains, including flour and corn.

Finally a fun idea is Darling Ingredients (DAR), that is a large animal rendering company that produces farm animal byproducts.

I should add one other idea. If you take the view that the fortunes of farm equipment suppliers correlate to growth in agriculture generally, then there is the world's largest tractor maker - John Deere. And also Tractor Supply Company (TSC) which has a network of big box stores in North America for farm equipment, supplies, feed, fencing materials and so on. Consider it B&Q for farmers.