234: Making Farmland Investment Accessible with David Chan
David Chan – COO and Founding Team Member of FarmTogether
Summary
Welcome back to another episode of the Startup Junkies Podcast!
In this week’s episode, Caleb Talley, Jeff Amerine, and Matthew Ward talk with the COO and a Founding Team Member of Farm Together, David Chan. FarmTogether is capitalizing on a never-before-seen opportunity in the farming industry. With many family farms being sold to outside ownership, FarmTogether allows regular people to make safe, stable farmland investments. David talks to the hosts about making farmland more accessible, international investment, the importance of climate change initiatives, and much more. Thanks for tuning in!
Shownotes
(1:15) Introducing David Chan and FarmTogether
(7:27) Making farmland more accessible
(12:38) What do returns look like through FarmTogether?
(17:23) COVID-19’s effects on FarmTogether
(23:52) International investment in farmland
(28:26) Brokers’ response to FarmTogether
(31:24) David’s climate change conviction
(37:18) Advice for the younger self
(40:12) Wrap up
Links
Quotes
“Farmers who have invested in efficient operations, efficient water, efficient planting densities, and new varietals are still operating in the black. And so that’s what’s very positive here because it means we believe that the future is very bright.”
(21:45)
“I really can’t overstate how large of a transfer of ownership is underway and expected to take place over the next 20 years. The USDA actually projects 70% of all US farmland is going to trade hands over the next 20 years. And it’s, you know, I think it’s equivalent to about 500 million acres. I think that’s twice the size of Alaska.” (27:04)
“We’re very proud to announce that we have 100% of our acres in a program called Leading Harvest, which is a broad sustainability standard for farmland investors in the United States.” (34:56)
Making Farmland Investment Accessible with David Chan
Did you know that we are at the forefront of a massive change in the farming industry? Yes, climate change is causing an evolution in how many crops are farmed. Still, the most significant development affecting the farming sector might be the immense amount of farmland changing hands over a two-decade span.
In the past, the majority of farmland was privately owned by individuals, families, and owner-operators that passed down family farms from one generation to the next. Compared to an industry such as real estate, farmland investment barely existed, with a mere 2% of American farmland owned by investors.
David Chan and the rest of the Founding Team at FarmTogether noticed that the tides were beginning to turn. They founded FarmTogether on the belief that farmland can be a solid, reliable, and enticing long-term investment for anyone. They are playing a substantial role in establishing and democratizing farmland investment.
Before founding the company, the partners noticed that farmland began to change hands in previously unseen ways. The traditional model of passing down farms from one generation to the next was starting to hit a rather large obstacle. The majority of potential farm inheritors don’t have an interest in owning and maintaining their family business. As they look to sell, they open the door for investors to join the farmland ownership club.
“I really can’t overstate how large of a transfer of ownership is underway and expected to take place over the next 20 years. The USDA actually projects 70% of all US farmland is going to trade hands over the next 20 years. And it’s, you know, I think it’s equivalent to about 500 million acres. I think that’s twice the size of Alaska.” (27:04)
One of the biggest challenges that FarmTogether is facing in their venture to promote farmland investment is familiarizing potential investors with farms as an asset. Some investors wrongly assume that farming is a bad investment because they’ve seen an article or two about single farms going bankrupt. FarmTogether uses data to assure investors that this assumption is false and that farmland is, in fact, a strong asset class.
“Farmers who have invested in efficient operations, efficient water, efficient planting densities, and new varietals are still operating in the black. And so that’s what’s very positive here because it means we believe that the future is very bright.” (21:45)
For David specifically, climate change was a significant motivator for entering the farming sector. He was convicted about the effects of climate change, and he knew he wanted to be involved in an industry that could have widespread impacts on turning the climate crisis around. Now, FarmTogether has taken serious steps towards ensuring that the farmland they handle is making positive impacts on the environment.
“We’re very proud to announce that we have 100% of our acres in a program called Leading Harvest, which is a broad sustainability standard for farmland investors in the United States.” (34:56)
For more information on investing through FarmTogether, visit their website.
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