SLM Partners makes first investment in organic farming in USA
SLM Partners has completed its first property acquisition in the USA on behalf of a new separate account that will help transition more cropland to organic certification
DECEMBER 02, 2019. SLM Partners has closed on its first acquisition in the USA, “Pike Farm”, a 80-acre farm in Illinois that was acquired in close cooperation with a local farmer who will now transition this land to organic certified production. The investment was made via a separate managed account backed by a family office investor with a strong commitment to environmental impact.
Pike Farm consists of high-yielding Class A cropland in Piatt County, 23 miles southwest of Champaign, Illinois. It was historically used to grow conventional corn and soybeans. SLM Partners identified the property while working with a local 5th generation organic farmer who was looking to expand his organic acreage. This farmer has now entered into a 10-year lease on the newly acquired property and will transition the land to regenerative organic production, using a planned rotation of alfalfa, corn, soybeans and wheat. It is expected that these changed farming practices will increase soil carbon, improve water quality and enhance on-farm biodiversity.
This is the first investment of a new SLM Partners strategy that seeks to expand the organic and regenerative agricultural movement within the United States. SLM Partners works with experienced organic grain farmers to identify viable plots of land for expansion, purchases that land, and then enters into long-term flex lease agreements at affordable rates that accommodate the upfront cost of organic transition.
SLM Partners has published a new White Paper – Investing in U.S. organic grains production – that describes the market opportunity for organic grains. Consumer demand for organic food is growing strongly in the USA, and organic food sales are now 5% of total food sales. There are strong price premiums for many organic crops. Yet, American farmers have been slow to transition to organic production because of perceived financial and agronomic risks. Investors with patient capital can help overcome these barriers, while receiving attractive financial returns and achieving positive environmental impacts.
SLM Partners established a new separate managed account in 2019 with the backing of a Philadelphia-based family office that is committed to impact investing. The SLM team has agreed terms on a second investment – a 212-acre farm in DeKalb County, Illinois – that will complete in February 2020. SLM Partners plans to raise additional capital via new separate accounts or funds with the goal of expanding its investment strategy to dozens of farmers and many thousands of acres of land.
ABOUT SLM PARTNERS
SLM Partners is an asset management firm that specialises in agriculture and forestry strategies that deliver superior risk-adjusted returns and positive environmental impacts. Founded in 2009, it manages an Australian beef cattle fund that is applying holistic planned grazing across 1.1 million acres of land and a new Irish forestry fund that is acquiring properties in Ireland for conversion to continuous cover forestry management. SLM Partners is developing and implementing investment opportunities for institutional investors and family offices in the USA focused on organic farmland and the production of organic grains.