The dividend yield on the Farmland Partners REIT has moved up given negative sentiment in the REIT, and Pittman believes his share prices are selling at a sharp discount to Farmland Partners’ internally calculated net asset value, so he is also buying back shares to the extent his cash flow, debt and asset sales allow.
The bullish case for agriculture prices over the long run is a play on emerging market consumption growth, as the biggest driver of food consumption worldwide will be growth in per capita income in the large population countries such as India and China—so farming also is a play on emerging market growth.
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I had the opportunity to meet Zick at Camp Kotok in Maine last August and was intrigued by the investment approach of Ceres Partners. The cash flows that are generated by the rental income paid by the farmers—in addition to the land appreciation that comes over time—make this an intriguing asset class with few vehicles that deliver this exposure.
To hear more about how both Pittman and Zick invest in farmland and the opportunities each of their firms can give, listen to our full conversation on our “Behind the Markets” podcast here.
This article has been republished with permission from Wisdom Tree.