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Vets In Ag Podcast

Episode 4: Chris Narayanan (USMC)

00:00 / 00:36:54

From ag consulting firms and brokerages to Wall Street investment banks and agribusiness power houses like John Deere and INTL FCSTone, Chris brings such a broad perspective that I think this episode has a little bit of everything for everyone.

We sat down with Chris Narayanan – currently an Extension Farm Management Specialist at the University of Tennessee Institute for Agriculture. After earning his bachelors degree from Texas A&M in Ag Economics, Chris then spent the next ten years as a Marine Corps infantry officer. Following his time in the service, Chris then went back to school to earn Masters in Rangeland Ecology and Management as well as an MBA from the University of Texas. This then ultimately launched Chris into the private ag sector where he has been working in a wide variety of sub-sectors within the ag industry for the past 15+ years.

One of my favorite parts of this episode was listening to Chris describe what he called “kitchen table” moments with farmers. I think this is something many transitioning vets seek but struggle to find after they leave active duty service; a way to connect with their profession in a way that is meaningful and service-based.

Have a listen to find out how Chris finally found this balance.

A great report just released by Savills World Research last month describing the state of global farmland from 2012 to the present. The report is based on data from 15 different world agricultural markets and is designed to provide comparative data on global farmland prices and market summaries. Here a few highlights from the report

The Global Farmland Index recorded an average annualised growth of 14.8% since 2002 and 6.6% over the past five years.
Farmland values are less volatile than other commodities and were significantly less affected by the credit crunch in 2008.

South America showed a 17.5% annualised growth since 2002. The above graph shows South America was only outperformed in index growth by Central Europe; now facing extremely unstable times due to the Brexit.
The report describes an innovative way of benchmarking farmland prices to account for regional variables or more specifically investment spend relative to output by determining the cost of acquiring land in order to grow a tonne of wheat. Our ‘land cost for wheat production’ league (Figure 3 below) takes the average value of farmland in 2015 and divides it by the average harvest wheat yield over seven years (2008 to 2014). By taking a seven year period it allows for any weather fluctuations to be accounted for.

Note that Uruguay and Argentina have some of the lowest costs of land per tonne of wheat values.
Investor interest and demand to diversify investment portfolio’s will remain strong. Farmland performance tends to be counter-cyclical to other assets

Bottom Line to Investors

Agriculture is a long term investment to iron out volatility.
Diversify your portfolio to spread risk across different regions
Due diligence, especially with a range of cultures, political administrations, ownership structures, tax regimes, foreign investment regulations, is essential to understand global markets.
The right asset in the right market will yield positive returns for the investor in the long term.

The Global Farmland Index recorded an average annualised growth of 14.8% since 2002 and 6.6% over the past five years.

Farmland values are less volatile than other commodities and were significantly less affected by the credit crunch in 2008.

South America showed a 17.5% annualised growth since 2002. The above graph shows South America was only outperformed in index growth by Central Europe; now facing extremely unstable times due to the Brexit.

Note that Uruguay and Argentina have some of the lowest costs of land per tonne of wheat values.

Investor interest and demand to diversify investment portfolio’s will remain strong. Farmland performance tends to be counter-cyclical to other assets

Bottom Line to Investors

Agriculture is a long term investment to iron out volatility.

Diversify your portfolio to spread risk across different regions

Due diligence, especially with a range of cultures, political administrations, ownership structures, tax regimes, foreign investment regulations, is essential to understand global markets.

The right asset in the right market will yield positive returns for the investor in the long term.