Masters in Business: At The Money — Farmland Investing

Host: Barry Ritholtz (Bloomberg)
Guest: Brandon Zick, Chief Investment Officer, Saris Farmland Fund
Date: October 8, 2025

Episode Overview

Barry Ritholtz sits down with Brandon Zick, CIO of Saris Farmland Fund, to explore the ins and outs of farmland as an investment class. The discussion breaks down farmland’s attractiveness for diversification, inflation protection, income generation, and long-term capital appreciation. The episode delivers practical insights for individual and institutional investors alike—examining sourcing strategies, regional preferences, risk factors (including climate change), ancillary income streams, and macro trends driving farmland's emergence in institutional portfolios.

Key Discussion Points & Insights

1. Why Invest in Farmland?

[03:03 - 03:34]

• Diversification and Correlation: Farmland income is positively correlated with inflation but non-correlated with traditional assets, providing valuable diversification for portfolios.
• Capital Appreciation & Yield: Farmland offers both income (from rent and crops) and long-term appreciation, unlike depreciating real estate.

"Farmland will generate a good amount of income. It's positively correlated with inflation and it's also non-correlated with other things in your portfolio and becomes a diversifier."
— Brandon Zick ([03:03])

2. Farmland Performance and Income Structure

[03:34 - 04:28]

• Returns Over 70 Years: Citing Chicago Fed data, farmland has appreciated ~6% annualized (inflation + productivity).
• Dividend and Reinvestment Models: Investors can receive dividend-like income or reinvest profits for compounding growth.

3. How Saris Sources and Selects Farmland

[04:28 - 05:42]

• Private vs. Public Transactions: Most deals are off-market or through private sales, not commonly listed.
• Tenant Network: Relationships with farmers often lead to inside opportunities, especially as land transfers from estates or families.

"There’s no Zillow for agriculture."
— Barry Ritholtz ([04:55])

4. Regional Focus and Selection Criteria

[05:47 - 06:31]

• "Sweet Spot": Midwest & Great Lakes — High-quality soils, ample water, proximity to population centers.
• States: Focus on Indiana, Michigan, Illinois, Wisconsin, Kentucky, Ohio, and western New York.

"We think that's our sweet spot because…it's very high quality soils, which are great for growing crops. We also have a lot of water resources, both underground and it rains."
— Brandon Zick ([05:47])

5. Inflation & Macro Trends

[06:31 - 07:17]

• Inflation Hedge: Rising crop prices and multiple land uses (e.g., development potential) drive value.
• Macro Forces: Booming economies raise land values, independent of actual agricultural production at times.

6. Ancillary Income Opportunities

[07:17 - 09:26]

• Timber, Hunting, Mineral Rights, Solar & Wind: Incremental income sources beyond crops.
• Solar Leases: Yield significantly higher returns (up to 15–20% per year) compared to farming.
• Data Centers: Increasing demand for farmland repurposed as data center sites, trading at multiples (8–20x) of farmland value.

"In the Midwest, we're seeing a huge demand for data center development that's anywhere from 8 to 20 times farmland value."
— Brandon Zick ([08:35])

7. Policy, Regulation & Data Center Development

[09:26 - 10:20]

• US-Only Data Centers: Government push for domestic server farms boosts land demand in targeted regions.
• Regional Shifts: Grid capacity and local government stance are crucial factors.

8. Risks in Farmland Investing

[10:20 - 12:20]

• Climate and Weather: Drought, flooding, and climate shifts key risks.
• Location Strategy: Favoring Great Lakes region for stable rainfall and soil quality.
• Regulatory Risks & NIMBYism: Agriculture generally enjoys policy favor, but development and water issues present challenges in specific regions.

9. California: Not Always Attractive

[12:20 - 14:06]

• Regulation & Water Scarcity: High value local crops, but poor scalability and increasing water/resource regulations, especially for row crops.
• Infrastructure Issues: Limited new water infrastructure, heavy regulatory burdens.

"Water will be the next big battle... We think it's more prudent to be in areas where there's an abundance of water."
— Brandon Zick ([13:17])

10. Desalination & Water Rights

[14:06 - 14:50]

• Desalination: Viable for municipal use eventually, but high cost and energy demands currently limit agricultural viability.
• Strong Agricultural Water Rights: In many places, farmers have senior water rights, even above cities, but aquifer recharge is a growing concern.

11. Vineyards and Specialty Crops

[15:05 - 16:06]

• Vineyards as Investments: Challenged by falling wine/craft beer consumption and high labor costs. Juice grape farming (e.g., for Welch's) cited as a rare exception.

"If you're just producing grapes and then selling them to someone else, that's selling the retail product, that's a diffic. So we don't get excited about investing in vineyards."
— Brandon Zick ([15:19])

12. Balancing Income vs. Appreciation

[16:06 - 17:17]

• Return Mix: High commodity prices mean more appreciation; low prices mean more income share.
• Lease Structure: Multi-year leases with built-in call options help manage volatility and allow upside participation during up cycles.

"That high income actually mutes volatility over time because you’re going to generate that 4% or 5% income every year."
— Brandon Zick ([16:23])

13. Future Challenges and Trends

[17:17 - 18:15]

• Competition: Institutional buyers still make up only ~3% of US farmland ownership, but interest is growing.
• Long-Term Orientation: Farmland aligns well with infrastructure funds and institutional needs for durable, income-generating assets with added optionality (solar, wind, timber, future development).

"Only about 3% of US farmland is institutionally owned... I think a lot of people are identifying farmland as a great asset, especially for long term oriented investors."
— Brandon Zick ([17:24])

Notable Quotes & Memorable Moments

• On Farmland’s Unique Appeal:
  "It's a capital appreciating asset. It's not a depreciation play — yield, capital appreciation, and an inflation hedge."
  — Barry Ritholtz ([03:23])

• On the Deep Local Expertise Required:
  “There’s no Zillow for agriculture.”
  — Barry Ritholtz ([04:55])

• On Water as the Critical Factor:
  “Water will be the next big battle that's out there. And restriction is going to come right after regulation…”
  — Brandon Zick ([13:17])

• On Farmland and Institutional Investors:
  "This is an asset you can hold for 30, 40, 50 years with some of that optionality..."
  — Brandon Zick ([17:54])

Important Segments & Timestamps

• Why Invest in Farmland? ([03:03])
• Farmland as Inflation Hedge; Historical Returns ([03:44])
• How to Source Deals ([04:39])
• Regional Focus and Water Resource Insights ([05:47], [06:31], [11:07])
• Ancillary Income (Solar, Wind, Data Centers) ([07:17] – [09:26])
• Risks: Climate, Regulation, Water ([10:20] – [12:20])
• California Challenges ([12:20], [13:17], [14:12])
• Vineyards and Specialty Crops ([15:05])
• Return Mix and Lease Strategy ([16:06])
• Growth of Institutional Investment, Future Trends ([17:24])

Takeaway

If you’re seeking a non-correlated, alternative asset class with solid income, capital appreciation, and inflation protection, farmland deserves a look. Regions with resilient water sources and strong commodity markets are key, as is the ability to harness ancillary income and navigate emerging environmental and regulatory risks. As more investors discover these attributes, competition for high-quality farmland is almost certain to intensify.