Iroquois Valley Farmland REIT – Organic Farm Investment

In this podcast and video (see video here), I interview Alex Mackay the Director of Business Development and Investor Relations at Iroquois Valley Farm. Alex sees food as the perfect conduit for making lasting environmental and social change with its necessary role in our everyday lives and its increasing presence in modern culture and society.

Iroquois Valley Farmland REIT is a restorative farmland finance company providing land access to organic family farmers, with a focus on the next generation. Starting in 2007 the Company has a long track record of successfully acquiring organic and transitional farmland. In 2016, the Company expanded its scope to include first mortgage financing.

Iroquois Valley Farm owns farmland that is organic or transitioning from traditional to organic. They lease it to farmers for 3 years with the ability to continue indefinitely. After 7 years, farmers can buy the land. Many farmers do not want to own the land. They prefer to invest in equipment. About 50% of farms in the US are owned by another person – not the person farming.

About 1 % of US farms are organic and about 5% of the food eaten in the US is organic. The US imports organic food to meet the demand.

Are all the farms organic or transitional?
Yes, the conversion from non-organic to organic is three years. It can take 5 years for the converting farm to return to the same amount of profitability. Organic farms need to rotate crops, have a diversity of crops, and do not have pesticides or herbicides.

Where does it operate? Are there plans of expanding to other area?
In 14 states, primarily in the mid-west and further east but they have plans to expand west. The cost of land is expensive on the west coast but there is good farmland and opportunities.

They generally buy mid-sized farms – 50 to 150 acres. The cost per farm is generally $500k to $1.5M. Most of the farmers sell wholesale.

Iroquois Valley Farms has more demand than money to buy farmland. They do not advertise. Farmers contact them. Banks are hesitant to loan to farms converting to organic because production reduces for several years.

How can someone invest? Where can they invest? Do they need to be accredited? Investment minimums? Time duration?
Right now offerings are for accredited investors (people with at least $1M to invest or an income of at least $200k per year).

The minimum is $31k to be a shareholder. This is a REIT (Real Estate Investment Trust), which requires that any dividends be paid out to investors each year. There is a 7 year lock up – when you cannot get your money out. After that there are limits to the amounts that can come out each year. The investment is available through Iroquois Valley Farms and can be held at Fidelity. They are

Near the end of 2018, Iroquois Valley Farms plans to offer an investment with a $10k minimum for any investor.

There is a fixed investment that pays 2.5% per year called a Soil Restauration fund which is open to accredited investors and has a minimum investment of $30k.

How big is the operation?
About $50M.

What’s the best way to contact you and get more information?

These podcast, blog and video are for informational use only. We are not making investment recommendations. This is not an appropriate investment for everyone. As with any investment, please read the prospectus and discuss it with your financial planner.