Agcapita Farmland Fund - 2011 Census of Agriculture
Agcapita Farmland Fund III – Farm Receipts Increase, Farm ConsolidationTrend ContinuesFOR IMMEDIATE RELEASE, ATTENTION INVESTMENT EDITORS – June 4, 2012 -CalgaryThe 2011 Census of Agriculture revealed higher Canadian farm revenues and anincrease in farm size reflecting a continuation of the land consolidation trend inthe industry. According to the census:1) Consolidation - “The Canadian agricultural sector continues to restructure asmany farms expand in scale of operation, consolidate, draw on technologicalinnovations to enhance productivity, and augment their sales. This trend,consistent with the economies of scale characterizing parts of Canadianagriculture, is evident when examining farm numbers by gross farm receiptsclass between 2006 and 2011.”2) Receipts - “Gross farm receipts grew by 3.9% (at 2010 constant prices)between 2005 and 2010 in Canada, and that this growth occurred primarily onlarger farms. The number of census farms with gross farm receipts of $500,000and over grew while the number of farms with gross farm receipts less than$500,000 decreased.”3) Economies of Scale - “Farms with $500,000 and over in gross farm receiptsaccounted for 11.5% of farms in 2011, and 67.9% of the total gross farm receiptsin Canada (Figure 2). In 2006, they represented 8.6% of farms and 60.1% ofgross farm receipts.”4) Farm Numbers - “In 2011, Canada had 205,730 census farms, a numberrepresenting a decrease of 10.3% (or 23,643 farms) since the lastcensus…Historically, the total number of census farms in Canada began todecline after 1941 followed by the accelerating urbanization of the 1950s. Thelargest 5-year decline on record was from 1956 to 1961 when the number offarms fell by 16.4% or about 94,000 farms (Figure 3). Total farm area reached ahigh in 1966 of 174.1 million acres, and in 2011 was 160.2 million acres.”Agcapita’s series of farmland funds continue to show great appeal toconservative investors concerned with inflation and the volatility of their existingpublic equity investments. Agcapitas analysis shows the risk of inflationincreasing hence a continued interest in farmland investments. Farmland hassimilar inflation hedging qualities to gold but with an ongoing cash yield that goldlacks. Farmland returns exhibit low volatility and this combined with the highabsolute returns from farmland equate to a favorable Sharpe ratio. Agcapita is
one of Canadas most experienced farmland fund managers, launching its firstfund in Q1 2008.Agcapita’s funds directly hold diversified portfolios of farmland in westernCanada, and in particular in the highly price competitive province ofSaskatchewan. Investors are provided with the comfort of a direct investment infarmland combined with a model of front-end loaded cash rents. Agcapita is partof a family of alternative investment funds with a focus on generating commodity-linked returns and with over $100 million in assets under management. Agcapitabelieves farmland is a safe investment, that supply is shrinking and thatunprecedented demand for "food, feed and fuel" will continue to move cropprices higher over the long-term. Agcapita is one of Canadas most experiencedfarmland fund managers, launching its first fund in Q1 2008.Agcapita Farmland Fund III was opened to investors in October 2011 with a $20million offering. Agcapita Fund III is the only farmland investment fund eligible forRegistered Retirement Savings Plans (“RRSP”).This news release may contain certain information that is forward looking and, byits nature, such forward-looking information is subject to important risks anduncertainties. The words "anticipate", "expect", "may", "should", "estimate","project", "outlook", "forecast" or other similar words are used to identify suchforward looking information. Those forward-looking statements herein made byAgcapita, if any, reflect Agcapitas beliefs and assumptions based on informationavailable at the time the statements were made (including, without limitation, that(i) the demand for agricultural commodities will continue to grow at a pace that isunlikely to be matched by growth in agricultural productivity, and (ii) investmentdemand for tangible assets such as agricultural commodities and farmland willcontinue to increase for the foreseeable future). Actual results or events maydiffer from those anticipated or predicted in these forward-looking statements,and the differences may be material. Factors which could cause actual results orevents to differ materially from current expectations include, among other things:risks associated with the ownership and operation of farmland, includingfluctuations in interest rates, rental rates and vacancy rates; general economicconditions; local real estate markets; supply and demand for farmland;competition for available farmland; weather; crop diseases; the price of grain andother agricultural commodities; changes in legislation and the regulatoryenvironment; and international trade and global political conditions. Readers arecautioned not to place undue reliance on any forward-looking informationcontained in this news release (if any), which is given as of the date it isexpressed herein. Agcapitas undertakes no obligation to update publicly orrevise any forward-looking information, whether as a result of new information,future events or otherwise.