- The document discusses Canadian farmland as an investment during periods of low or negative real interest rates (when inflation is higher than nominal interest rates). It finds that farmland appreciates significantly more during such periods, averaging 11.3% annual returns, compared to periods of higher real rates where returns are barely positive. - Canadian farmland demonstrated resilience during the 2020 COVID-19 economic disruption, with appreciation of 3.6-8% across provinces. - Soft commodity prices have increased noticeably in recent quarters, benefiting Canadian farmland and food producers.

1. Veripath Q1 2021 Newsletter

2. www.veripathpartners.com 3
Canadian Farmland in a Low Real Rate World
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
Farmland S&P 500 10 US T-Bond FTSE US REIT Index CPI
0
100
200
300
400
500
600
700
1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981
Farmland S&P 500 10 US T-Bond FTSE US REIT Index CPI
Farmland outperformed CPI, S&P, CRE and
Bonds during 1970s stagflation
Sources: Canadian farmland data-FCC, CPI-Statistics Canada, SP500-10yr
Bonds-Macrotrends, FTSE REIT-Nareit, Veripath analytics
Given current economic and
monetary conditions this quarterly
update seems like a very timely to
discuss farmland and inflation.
Farmland historically has had a
significant positive correlation to
inflation. Canadian farmland has
been an ef ective tool (positive cost
of carry) for adding
inflation/stagflation insurance to
an investment portfolio – we
believe farmland hedges
“stagnation” because of the
inelastic demand for food and
“inflation” because it is a non-
depleting, capital asset that
produces infinite series of
commodities which are consumed.
f
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981

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Farmland performs well in lower/negative real
rate environments Canadian farmland returns
(land price change = solid line, real rates = dotted line)
Sources: St Louis Federal Reserve, Statistics Canada(14),(21), Macrotrends(22),
Hancock Agricultural(23), real rates = CAD 10 year bonds – CPI, Series runs to
2019, Veripath analytics(33)
We took this analysis one step further and examined
the ef ect of long-term real rates (10-year CAD bonds
minus CPI) on Canadian farmland appreciation
behaviour. We created a cut-of into lower (lower than
4%) and higher real rate regimes (higher than 5%) and
then analysed return data from 1970 to 2019.
f
This series obviously includes the unique
1970s stagflation event (GDP contraction
combined with highly accommodative
fiscal and monetary policy – arguably
conditions that exist today as well). By
analyzing the data in this fashion rather
than simply conducting a correlation
analysis over the entire time series
Canadian farmland sensitivity to the real
rate environment became apparent:
Low-Rate Periods – Real Rates < 4%
• Average Annual Farmland
Appreciation - 11.3%
• Up Years as Percent of all Years -
97.1%
• Average Size of Up Year - 11.7%
High-Rate Periods – Real Rates > 5%
• Average Annual Farmland
Appreciation - -0.1%
• Up Years as Percent of all Years -
26.7%
• Average Size of Up Year - 5.7%
Real rates appear to have had a material
ef ect on the behavior of Canadian farmland
over the 40-year period studied. This ef ect
was expressed in both average appreciation
rates and the likelihood of drawdown – both
of which improved as real rates dropped
below 4%. The current lower real rate
environment, if it continues, appears to be
highly favorable to ongoing farmland
appreciation prospects.
f
f
f
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Real Rates
<4% >5%
Average Appreciation (% pa) 11.3% -0.1%
Number of Up Years 34 4
Up Years (%) 97.1% 26.7%
Average Size of Up Year (%) 11.7% 5.7%

4. Canadian Farmland was Resilient
to COVID Economic Dislocation
www.veripathpartners.com 5
Farm Credit Canada released annual land price report recently. In 2020, Canadian farmland
continued to demonstrate its consistent, low-volatile return profile with relatively uniform appreciation
across the various provincial markets (and showing no particular downward pressure compared to the
COVID induced economic dislocation suf ered in the broader economy).
f
BC
8.0%
Que
7.3%
Alberta
6.0%
Sask
5.4%
MB
3.6%
Ont
4.7%
Canada
5.4%

5. www.veripathpartners.com 2
Canadian Farmland
and Soft Commodity
Price Trends
According to the FAO, food price inflation has made a material
jump in the last 2 quarters. Soft commodity prices are up
noticeably across the entire agriculture complex. For example,
Canola has trended up to an all-time high. Canada is a world
leader in Canola production at around 20M MT annually. Canola
is used to produce edible oils and protein feed for livestock –
increasing incremental demand for these from China is a material
factor in the current run-up.

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Calgary, AB T3E 6L1
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The opinions and views expressed in this paper are subject to change or modification without notice, and Veripath does not undertake
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Sources: Canadian farmland data-FCC, CPI-Statistics Canada, SP500-10yr Bonds-Macrotrends, FTSE REIT-Nareit, Veripath analytics, St Louis
FederalReserve,StatisticsCanada,Macrotrends,HancockAgricultural, realrates=CAD10yearbonds–CPI,Seriesrunsto2019
About Veripath
Veripath is a Canadian alternative investment firm.
Members of Veripath's management team have been
investing in farmland since 2007. Veripath is focused
on risk first and invests in a way that seeks to reduce
operational, weather, geographic and business-related
risks while capturing the pure return from land
appreciation for its investors. Our goal is to partner
with farmers for the long-term using innovative lease
arrangements and/or land-unit swaps to give certainty
to farming operations.