FSC / Press Release
Agcapita Farmland Investment Partnership Says Even Higher Global Food Prices are Ahead
Stephen Johnston is available for media interviews in response to the UN Food and Agriculture Organisation report showing food prices increased nearly 40 percent globally in 2007
Calgary, Alberta CANADA, April 08, 2008 /FSC/ - Agcapita Farmland Investment Partnership (AFIP - 0),
"Food price increases are being driven by economic growth in the emerging economies, rising oil prices and slowing production growth for agricultural commodities" said Stephen Johnston, investment director for Agcapita Farmland Investment Partnership ("Agcapita"). Current Agcapita research projects a long-term productivity gap approaching 2.5% per year which would be sufficient to create sustained real annual price increases in the agricultural commodity complex approaching 10% annually.
Agcapita is a Calgary based partnership that allows investors to access a key part of the agriculture production chain by making direct investments in Canadian farmland. The Canadian farmland investment premise is driven by several key points:
1. Canadian farmland is high quality: Canada is the third largest wheat exporter in the world and in aggregate one of the largest agricultural producers in the world. The three western Canadian provinces alone have approximately 135 million acres of farmland and produce approximately 20 million tons of wheat a year.
2. Canadian farmland is low cost: Agcapita believes Saskatchewan farmland in particular is an undervalued asset. "With an average price of $350 per acre, Saskatchewan farmland is some of the least expensive in the world. The prices in Alberta are almost 3 times higher than Saskatchewan at an average of $900," said investment director Stephen Johnston.
3. Canada has world class farming infrastructure: Unlike investing in farmland in emerging markets such as Argentina, Brazil or Russia, Canadian farmland is supported by first world storage, processing, and shipping infrastructure. This infrastructure is extremely costly to reproduce.
4. Canada has low political risk: Unlike emerging markets, Canada lacks significant political risk. Canadian farmland owners benefit from a transparent and enforceable title system with no material risk of de jure or, worse yet, de facto expropriation.
5. Strong Global Macro Drivers: Canadian farmland prices are being driven by strong and persistent global market forces.
* A decreasing amount of arable land worldwide, proportionate to the increasing population;
* An increasing demand for meat calories (as development occurs and standards of living increase) which need more farmland for production than grain calories; and
* A commitment by many countries (including Canada) to increase the use of biofuels, which will need farmland for production.
6. Returns: Agcapita captures both operating and capital appreciation returns by acquiring a portfolio of farmland which it leases to qualified operators on a cash rent and/or crop sharing basis.
For a detailed analysis of farmland investing please download Agcapita's Farmland Investment Report at www.farmlandinvestmentpartnership.com/investment.php.
For further information please contact Stephen Johnston at Agcapita. Mr. Johnston began his career as a commercial lawyer at Milner Fenerty in Calgary in 1990. In 1994, Mr. Johnston joined AT Kearney in London implementing risk management systems for Swedish investment banking clients. From 1994 to 2003 Mr. Johnston worked in the European debt and equity markets first as a telecoms banker at the EBRD, then as the senior fund manager of the private equity team at Societe Generale Asset Management - Emerging Markets UK (responsible for $285 million in closed-end funds), and finally as a part owner of a 12 million British pounds technology fund investing in European start-ups. Since returning to Calgary in 2003, Mr. Johnston has been a founder of several businesses including a national media company and a junior international oil company. Mr. Johnston has a BSc. (Honours in Biology) (1987) and a LLB from the University of Alberta (1990) and a MBA (1994) from the London Business School. Agcapita has an experienced investment team supported by an advisory panel with deep knowledge across the entire range of agriculture issues. The investment team has over 40 years total private equity & public markets transaction and fund management experience and over $750 million in total career transaction value. The investment team currently manages a group of alternative investment vehicles with approximately CAD$ 50 million of assets under management. The advisory panel has 25 years experience in large scale farm operations; 2 PhDs in agriculture related fields - biotechnology and economics; 37 patents in plant genetics, 15 pending; and 20 years in senior government positions in Saskatchewan including cabinet posts.
For more information:
Agcapita Farmland Investment Partnership
Email - email@example.com
Source: Agcapita Farmland Investment Partnership - http://www.agcapita.com
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