Tuesday, October 27, 2015

Attention Fiduciaries: Strawberry Farming Up to 9796% More Profitable Than Corn

Following up on last Wednesday's "Land: U.S. Orchards Again Outperform Cropland For Investment Returns" we have another instance where cranking out the High Fructose Corn Syrup may be problematic.
Of course Gladstone may just be talking their book as Gladstone Land, one of four publicly traded vehicles run by Gladstone Management, focuses on fruits and veggies.
From Agrimoney:

'Strawberry fields forever,' says Gladstone
Growing strawberries in California is 9796% more profitable than growing corn in the Midwest, Gladstone Land said, in the latest evidence of underperformance in row crop land. 
High value fruit and vegetable land was "more profitable and less volatile than those growing commodity crops", Gladstone said. 
Based on data for 2013, the most recent year with verified data, the US land investment company said the an acre of price corn land yielded gross revenues of $757, while the gross revenue of an acre of prime California was $53,067, assuming a market price of 80 cents a pound for strawberries. 
Diverging fortunes
Per acre                                    Strawberries      Corn
Gross revenue per Acre               $53,067             $757      
Gross profit                               $11,363              $394      
Rent                                         ($3,927)             ($201)  
Other overhead costs                 ($2,866)            ($145)  
Grower net income                      $4,570              $48        
(before government pay-outs)
Source: Gladstone Land
The difference in rent, meanwhile, was more modest. Based on 2014 figures, Gladstone pegged the average rent for prime Midwest corn land at $201 an acre, compared with around $4,000 an acre for strawberry land. 
And since 2013, corn prices have been weakening, while Gladstone says that prices for strawberries have actually "risen modestly".
Gladstone saw net profits per acre for strawberry farmers in California at $4,570 an acre, compared to just $48 an acre for Midwestern corn farmers, excluding crop insurance and government payouts. 
"A farmer with 10,000 acres in corn in the Midwest would only need approximately 143 acres of strawberry ground in California to generate the same amount of revenue," Gladstone said....MORE