In an April 20, 2021 report from Farm Credit Canada “2020 FCC Farmland Rental Rates Analysis” leasing farmland is becoming an increasingly popular option in the farming community. According to Statistics Canada, 43% of all farmland in Canada was leased in 2016 compared to 39% in 2011. Young farmers are more likely to rent land (50.6% of farmland was rented land to operators under 35 in 2016helping them to reach greater operational scale.1
With the increasing popularity of leasing farmland, Western Canadian provinces are leading the way with higher lease rates than the national average with, Saskatchewan and Manitoba ranking 2nd and 3rd respectively in Canada.1
What influences the lease rates? Veripath Farmland Funds has identified various factors that include: yield production, soil type, availability of cultivated land to rent vs concentration of operators, duration and type of lease agreement and interest rates. According to Carmon Blacklock of Veripath “Lease rates can vary considerably across different provinces and regions, we at Veripath analyse all these factors when purchasing and constructing lease agreements.”
Who is Veripath: Veripath is a Canadian alternative investment firm. Members of Veripath’s management team have decades of farmland, private equity, and private credit investment experience. Veripath implements its farmland strategy in a way that seeks to preserve as far as possible farmland’s low-volatility return profile – the attribute that generates a material portion of Canadian farmland’s superior risk adjusted return profile. Veripath does this by seeking to minimize operational, weather, geographic and business-related risks – and capture the pure return from land appreciation. Canadian zero-till farmland portfolios may also be a useful addition to ESG driven mandates combining superior risk adjusted returns with environmental benefits. For more information on Veripath please feel free to register online at www.veripathfarmland.com or call 587-390-8267.
Disclaimer: This article is only an expression of our opinions on the subject matter set forth herein and includes information from, or data derived from, public third party sources including commentaries, articles, industry publications, reports and research papers. Veripath has not independently verified the accuracy, currency or completeness of any of the information and data contained in this article which is derived from such third-party sources. While we have a good-faith belief in the accuracy of what we write, all such information is presented “as is,” without warranty of any kind, whether express or implied. The use made of the commentary set forth in this article is solely at the risk of the user of this information. This article is intended only as general information presented for the convenience of the reader and should not in any way be construed as advice of any kind, investment or otherwise. Aggregate data as to number of partners, locations, acres and AUM, is consolidated from all assets managed by the principals of the Veripath investment team across three separate farmland portfolios as of Q4 2020. AUM represents estimated value of these assets as of same date. Investors in Veripath Farmland LP and Veripath Farmland (UR) LP will be invested in only the portfolios held by these entities. The aggregate data is provided for illustrative purposes to demonstrate other farmland portfolios managed by the principals of Veripath Farmland LP and Veripath Farmland (UR) LP.