Nearly 42,000 Acres of Farmland Sold to Mormon Church for $289 Million

In October 2024, a sale of 41,554 acres of farmland across a portfolio of 46 farms was sold by Farmland Partners Inc. to Farmland Reserve, Inc., an entity of The Church of Jesus Christ of Latter-day Saints, for $289 million. 

Who Is Farmland Partners?

Farmland Partners Inc. is an internally managed real estate company that owns more than 140,000 acres of farmland across 15 states and makes loans to farmers secured by farm real estate. The company went public in 2014, and has since purchased more than 300 farms through various transactions with other investors, landlords, and farmers.

Farmland Details

Paul Pittman, the executive chairman for Farmland Partners Inc., said the recent sale included multiple tracts of land across eight states, including Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, North Carolina, and South Carolina. The acres sold were predominantly grain farms, as well as corn, soybean, rice, and cotton farms, Pittman said.

When asked how this sale might impact local farmers, Pittman said the sale helps bring “another high-quality investor in the local region.” 

While Pittman acknowledged concerns that farmers and ranchers might have regarding the sale of the nearly 42,000 acres of farmland and the impacts it might have on local communities, he said this sale doesn’t change things locally in a meaningful way. In fact, he said that it’s just the transfer of land from one remote non-farmer owner to another. This is because Farmland Reserve has already made the commitment to maintain the same farmer tenants who are currently on the land, Pittman said. 

Additionally, Pittman said that Farmland Reserve was the investor they chose to sell to because of their reputation as excellent long-term land stewards. “They very seldom sell farms,” Pittman said. “Farmland Reserve may own this land for 50 years or more.”

Farmland Partners has also owned many of the tracts they’ve sold to Farmland Reserve for nearly 10 years, Pittman said. “It’s not like we’re land flippers.”

Local Farmers Get First Right of Refusal

While the current tenants were offered the opportunity to purchase the land prior to the sale with Farmland Reserve, due to their contracts’ right-of-first-refusal clause, Pittman said none elected to take Farmland Partners up on the offer. 

Federal Laws Restrict Farmland Partners’ Ability to Make Multiple Sales

The sale was also managed as one larger sale due to federal laws, Pittman said. Farmland Partners is considered a real estate investment trust (REIT), a company that owns, finances or manages properties and then is required to pay most of that income to investors. As an REIT, Farmland Partners is bound by tax code IRC § 1033, which limits them to selling no more than seven properties in one calendar year.

Pittman said this creates challenges for Farmland Partners when it comes to selling tracts of land to individual farmers. In 2023, Pittman said some of their sales of farmland were made to individual farmers. “We’re happy to have a farmer buy a farm from us,” Pittman said, “but we’re really restrained by federal law.”

This means that, should Farmland Partners wish to have sold the 46 individual farms that made up the portfolio sale to Farmland Reserve, the tax code would have prevented them from making more than seven individual sales.

Tenant Reaction

Despite the change in land ownership, Pittman said Farmland Reserve met and interviewed all the farmer tenants on the sold land before the sale. He said they were aware of the transaction and supported it. 

Doug Rose, CEO of Farmland Reserve, said Farmland Reserve is an investor with a long-term vision, and they “look forward to leading these productive farms to local farmers for many years to come.”

Economic Valuation of Farmland Sale

At $289 million for 41,554 acres, Farmland Reserve purchased the farmland at an estimated valuation of $6,954.81 per acre. Pittman said the sale was more or less at market value.

The majority of the farmland involved in the transaction between Farmland Partners and Farmland Reserve was cropland that included grain farms, as well as corn, soybean, rice, and cotton farms.

According to the USDA Land Values 2024 Summary report released on August 2, the U.S. cropland value averaged $5,570 per acre for 2024. The farm real estate value for all land and buildings on farms in the U.S. averaged $4,170. 

In a breakdown from the eight states involved in the sale, cropland in Arkansas was valued at $3,600 per acre. Florida cropland was valued at $10,170 per acre. Louisiana was valued at $3,480 per acre. Nebraska was $6,540 per acre. Oklahoma averaged $2,310 per acre. North Carolina cropland value was $5,930. South Carolina was valued at $5,120. 

Rabail Chandio, an assistant professor in the department of economics at Iowa State University, said that the purchase of farmland by Farmland Reserve doesn’t necessarily indicate a trend of farmland being bought by investors. “There’s always a fraction of sales that are accounted for by investors,” Chandio said, “and something like this comes up every now and again.”

A general trend that has been occurring for the past decade, though, is the purchase of farmland by retired farmers who are sometimes local or out-of-state, Chandio said. These retired farmers will still be classified as investors, she said.

While sales of this nature can sometimes have some implications for farmland values, Chandio said that’s only the case if it becomes more common. “Given how infrequent these are,” she said, “they don’t have an impact on the farmland values.”

Factors that are impacting the upward trend in farmland values are nationwide interest rates, net farm income and commodity prices, economic uncertainty, and land supply, Chandio said. 

While interest rates have begun decreasing, Chandio said it takes about a year for changing interest rates to impact farmland values. “So far, we’re just absorbing the effects of the aggressive interest rate hikes.”

Chandio said the fact that land remains in limited supply and the demand for land remains consistent, “the supply ensures that we are moving in an upward trajectory” as far as the farmland values are concerned.