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Investors in Farmland

B2 Farms SunsetB2 Farms seeks investors who understand the potential return from investing in agricultural farmland. We believe that farmland offers excellent investment value with good income potential and long-term capital appreciation. At B2 Farms, we’ll help investors locate, invest and/or manage farmland assets and investments.

Interested in Farmland as an Investment?

  • Investment

According to the USDA, from 1999 to 2008 the Average Farm Real Estate Value has increased from $1,030/acre to $2,350/acre. During that same timeframe, the Average Cropland Cash Rent has increased from $67.50/acre to $96.00/acre

Although farmland values have decreased 5-10% from their peak in 2008, strong commodity prices, farm programs, outside investments, favorable interest rates and tax incentives will continue to drive farmland values higher in the near future.

We seek to manage farmland that can produce a return of at least 3-5% annually.

  • Tangible Asset

Farmland is a tangible asset becoming more scarce. As urban sprawl has increased, the amount of land available for agriculture has decreased.  New agricultural cropland isn't created any more.   The supply is eternally fixed and decreasing.

  • Recreation

Farmland can be recreational. Owners who enjoy hunting, fishing or conservation find farmland ownership as an additional benefit. Farmland can also be rented or leased to hunters, fisherman and outdoor enthusiasts.  Their fees will provide additional income for their opportunity to have access to the farmland. Farmland usually has a thriving bear, duck or deer population varying with location.

  • Carbon Credits

Farmland owners can generate additional income by selling carbon offset credits on the Chicago Climate Exchange. Certain land management practices such as no-till farming, grassland plantings, and tree plantings are just few ways that carbon credits can be obtained. This is a new facet of farmland investment that will gain increasing importance in the future.

  • Tax Benefits

Farmland improvements such as drainage tile and levees can be depreciated. Farmland can be held in IRA’s and can be used in 1031 exchanges to minimize capital gains taxes. B2 Farms can help you explore these strategies.

Working with B2 Farms

Our primary purpose is to operate profitable farming operations to provide maximum return for our investors. Here are some ways a farmland investment can diversify your investment portfolio, increase your current return, and play a part in your estate planning.  Several options include:

  • Cash Lease

Investor owns farmland and tenant leases back the farmland from the investor for a cash price. Leases can vary depending on your geographic location. Productive farmland in the Midwest such as central Illinois and Iowa can rent for as much as $300/acre. Productive farmland in the eastern United States can range from $100-$200/acre.

  • Flex Lease

Investor owns farmland.  Tenant leases back the farmland from the investor for a cash price plus a flex price based on commodities price and inputs. Flex leases are relatively new and becoming more common year to year. Typically, an agreed-upon cash rent base is set. A flex price is negotiated based upon commodity and input prices shortly before the growing year. A cap on the flex price can be set to minimize volatility.

  • Crop-Share

Investor and tenant split the costs, risks, and profits of the crop

  • Custom Farm

Investor owns farmland and assumes all crop input and marketing decisions. Investor has tenant plant and harvest crop at an agreed upon cost/acre. In these situations, the farmland owner might find it more profitable to have tenant custom farm the land instead of leasing out the farmland to a tenant.

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