Latter-day Saint investment auxiliary Farmland Reserve agrees to buy 46 farms in eight states

Farmland Partners Inc. is selling 46 farms in eight states to Farmland Reserve, Inc. , an integrated investment auxiliary of The Church of Jesus Christ of Latter-day Saints.

Farmland Reserve has agreed to pay $289 million for a total of 41,554 acres of farmland, according to a news release issued last week by Farmland Partners. The cash deal is scheduled to close on Wednesday.

The farms changing hands are located in North Carolina, South Carolina, Florida, Mississippi, Arkansas, Louisiana, Oklahoma and Nebraska. They grow corn, soybeans, cotton, rice, peas and peanuts.

The new owner plans to lease the farms to local farmers, Farmland Reserve CEO Doug Rose said in the news release.

“We are grateful for the opportunity to work with Farmland Partners to acquire this unique portfolio of high-quality farmland,” he said. “We’re also gratified they saw us as the right buyer for these properties and the farmer-tenant relationships that come with them. As an investor with a long-term vision, we look forward to leasing these productive farms to local farmers for many years to come.”

Farmland Reserve leases land to local farmers and to solar and wind renewable energy developers, according to its website. Farmland Reserve also leases land to its operating subsidiary, AgReserves.

Why does the Church of Jesus Christ invest in farmland?

The church, through investment auxiliaries and other outlets, is an agricultural titan in the United States, according to Landgate, an online marketplace for commercial land resources and news. Landgate estimated that the church and its auxiliaries own an estimated 1.7 million acres of U.S. farmland worth $16 billion.

As a privately held investment auxiliary of the church, Farmland Reserve doesn’t comment on acreage estimates from third-party sources.

The news release about the sale said, “Farmland Reserve’s earnings support the mission of the church and its religious, humanitarian, educational and charitable good works.”

The farms contribute both funding and products for humanitarian relief like that provided to food pantries during the COVID-19 pandemic.

In August, Farmland Reserve announced a proposal to annex 52,450 acres of its Deseret Ranch in central Florida to Orlando. In September, the Orlando City Council voted 6-1 to advance the annexation to a final vote on Oct. 21.

Farmland Reserve is a for-profit company and pays both real property taxes and personal property taxes, “just like any other ag producer or rancher,” a Farmland Reserve spokesman told Flatwater Free Press last year.

Why did Farmland Partners sell the land?

Farmland Partners will realize a $50 million “total gain” on the sale, or “approximately 21 percent over the aggregate net book value of the farms comprising the portfolio,” according to the release.

FPI’s president and CEO, Luca Fabbri, said the company would use about half the money to reduce debt, then buy back stock, pursue acquisitions and “expect to make a significant special distribution to shareholders at year-end.”

FPI expects to continue to own or manage 140,000 acres in 15 states.

Farmland Reserve paid about $6,950 per acre.

“We are pleased to transition our long-standing tenant relationships to a high-quality institutional investor that values relationships as we do,” Fabbri said about selling the farms. “Farmland Reserve is highly respected in the farmland community as a best-in-class owner that manages farms expertly and deals honestly and ethically with its farmer tenants. We strongly believe that our farmer-tenants will have an excellent partner moving forward.”