Agriculture's Best Investor Bet
With only 1% of U.S. farmland certified organic, converting away from a monoculture presents perhaps the greatest environmental investment opportunity of the 21st century.
Iroquois Valley Farms, LLC was formed to enable investors to make a direct investment in a healthier food system.
If we want 100% of food from healthy soils, based on sustainable practices, it’s the investment community that makes the decision whether that happens. We're all going to get the food that we decide with our finances," said John Steven Bianucci, Director of Impact at Iroquois Family Farms.
Iroquois Valley Farms now has 3,500 acres, 66% of which is farmed by millennials. The farmers working with Iroquois Valley Farms are on a solid foundation, because the company has built assets so that they can indefinitely renew leases. Iroquois Valley Farms believes that is a factor that sets them apart from other farmland trading models. "Our farmers want the land for the rest of their lives, and are willing to share a portion of their income to attain land security. We closely manage our finances to secure our pledge to keep the farmers on the land" said Mr. Bianucci.
|Millennials are Rising||And transitioning away from a Monoculture|
The company works with farmers to help them get the organic certification that can take three years or more. A central piece of that transition is moving away from a monoculture: the practice of growing one crop like corn, cotton or wheat, maintaining growth by using non-organic fertilizers. David Miller, CEO at Iroquois Valley Farms, added that organic certification starts with four crops, but then farms evolve, many to become even more diverse through the addition of new crops such as ancient grains or edible beans, as opposed to soy and corn, or even turkeys or other livestock. Through the process, the land that was toxic with chemicals returns to health, which means longer productivity for the land and reduced dependence on costly fertilizers for the farmers.
“Conversion of dead soils to living soils that are organically farmed. That’s the transition. That’s literally from dead to life.” added Mr. Miller. "That's a very big deal that will take billions in capital."
Growing Market Share to Meet Demand
From their founding ten years ago, the company has grown through investments from accredited investors, those with over a million in assets or annual incomes in the $200,000 range, or institutional investors with a minimum of $5 million in assets. The reason that young companies are only available to accredited investors is to protect unsophisticated buyers. However, Iroquois Valley Farms is in talks with the SEC to be approved for a wider investor audience. While the exact framework is in progress, Mr. Miller believes that they will be a Reg A+ exemption that will retain their private equity status but allow up to a $50 million offering to non-accredited investors. Their growth has been fueled by:
- Early credibility was provided both by The Calvert Foundation, through its managed assets portfolio, and by being selected to the Impact Assets 50 four years in a row.
- For the first few years, since Iroquois Valley Farms focused on building farms and capital, the company did not provide a redemption structure. As their farms have turned profitable, the company has been able to provide liquidity, which means more options for investors.
- The company is considering restructuring to a REIT (Real Estate Investor Trust), which would simplify tax reporting, providing more transparency and flexibility for financing, which could be a better platform for growth.
- Preliminary financial results indicate that Iroquois Valley Farms finished 2015 with record assets, equity and income from operations. The company is considering a dividend for investors, which is another key step in moving the $25 million dollar company away from 'start-up' status.
Mr. Bianucci added that "The public market above us is waiting for us to get a bit bigger to buy in. But there are Millennials that love what we do and want to be able to be part of the Iroquois Valley Farm family." Having proved their model, they see their future growth. Said Mr. Miller. "Now we just have to keep up with it."
About Iroquois Valley Farms
As a corporate guideline, the Company does not look for specific farmland to purchase. They develop relationships with farmers, mostly young and organic, that want to grow their farm business. They then move to purchase there is a ready, willing and able farm tenant in hand. For more information please visit http://iroquoisvalleyfarms.com/. Connect with corporate staff at firstname.lastname@example.org