A Message From The FarmTogether Founder: The Next Chapter
FarmTogether Founder, Artem Milinchuk, takes a look back at what inspired FarmTogether, the first few years as a startup founder, and his vision for the chapter ahead.
I am very excited to announce the next chapter for FarmTogether.
Beginning today, I will be taking on a new role as Head of Strategy and Special Projects, while continuing to serve as Chairman of the Board. I am thrilled to announce that I, and our Board, have appointed our CFO, Jared Hine, to take over the role of CEO.
As we transition to this next phase of growth, I wanted to take a moment to share the story of how FarmTogether was inspired and founded, the milestones we’ve surpassed over the past five years, what our future holds, and what this means, most importantly, for you - our farmers, clients, investors, partners, and friends.
The Early Days
To understand my passion for food and farming – the reason behind FarmTogether – let’s start at the beginning.
I spent the early years of my life in the Soviet Union, at a time when food was scarce. If you ask anyone who lived there during that time, they’ll tell you about the always empty grocery shelves and the 2-3 hour wait to purchase something as mundane as bananas, which would only occasionally appear in stores.
In order to sustain our family, my grandparents had a few patches of land where three generations – my grandparents, parents, and siblings – grew potatoes and vegetables. At the time, machinery, fertilizer, and pesticides were too expensive for almost everyone, which meant we had to do everything manually. While the work was hard, these harvests would last us through the winter, where we’d enjoy all sorts of delicious potatoes and marinated vegetables.
As a child, the work was also fun. I remember walking the patch every summer with my grandparents, collecting Colorado potato beetles by hand and putting them in a glass jar. Talk about doing “organic” farming before it was cool! This early experience gave me a deep appreciation for food and land. To this day, my grandparents’ mantra still rings in my mind:
As long as we have our farmland, we’ll be okay.
Just as my childhood was defined by ‘Soviet’ Russia in the ’80s, the next chapter of my life reflected a changing Russia in the ’90s and early ’00s. First, there was the “Wild West” Russia, a time defined by free markets and little regulation, followed by the Russia of the early 00s. This was an exciting time when the country was striving to build a globally competitive and integrated economy.
I remember coming back to those once-empty shelves I had witnessed in the late 80s, and it was incredible to see how quickly things had changed. Once the economy opened up, it seemed the shelves were stocked overnight. Bananas included.
It was this chapter of my life that inspired me to study economics and finance. On a global scale, we have enough resources to provide for everyone on this planet. It’s just a matter of putting the right economic systems in place. For example, if we eliminated just a quarter of global food waste, we’d be able to feed more than 950 million people currently lacking food security. Just a quarter!
The idea for FarmTogether sprouted from what I was seeing on both the institutional and retail sides of the investment communities.
It was the beginning of 2016, and I was working at the Ontario Teachers’ Pension Plan, a forward-thinking pension fund with $200B of assets to date. OTPP took an early interest in infrastructure, timber, pre-IPO tech companies, and many other less-mainstream strategies at that time… including farmland. While OTPP was still very early with its investments in farmland, the opportunity was obvious.
An untapped $10T market.
One with an excellent risk/return/diversification profile, but very little investor ownership. In fact, only around 2% of the dollar value of all U.S. farmland is financially backed by institutional investors, despite boasting a total US value of $2.7 trillion ($10T globally).
Around this same time, my friends began asking for recommendations on investments that would be completely opposite and uncorrelated to their tech-heavy portfolios (both from a career and a stock perspective). My answer was easy: farmland, only soon to find that the asset was widely underutilized, and moreover, widely unheard of. There was no Bloomberg or Redfin or MLS for farmland. Additionally, for those who can’t afford to buy a property outright, there were virtually no options to invest.
This lack of a marketplace, along with several other barriers, had kept farmland out of reach for most. This was a massive missed opportunity, and the idea for FarmTogether was born.
The First Chapter
On the 19th of December, 2017, Mr. Jeffrey W. Bullock, the Delaware Secretary of State, incorporated FarmTogether, Inc., and we were off to the races.
It took us a while to raise the initial capital for FarmTogether, launch the first version of our site, and come up with our distinct ‘sunrise/sunset on the farm’ color palette. The days were long, and the nights even longer. I loved every minute of it.
Our first deal, El Nido Almond Farm, was launched at $510,000. It took us close to 2 months, and hundreds of emails and phone calls. On numerous occasions, I thought we wouldn’t make it. But then at the 11th hour, one investor reached out to take the remainder! It was a surreal and magical moment to sign that first title package, to look at my team and say,
Well, we now manage an almond farm, we are officially in business!
Since then we have launched, syndicated, and closed many deals the size of El Nido, and many much larger. Some have closed in a matter of hours, not months. But El Nido felt special. To this day, investors in El Nido still receive a bag of almonds from the farm every year with a handwritten thank you note from our team.
Impact Beyond Returns
FarmTogether’s mission and vision crystallized as we progressed as a firm and truly began to realize the long-term impact potential of farmland.
Let’s start with our vision: to ensure peace and plenty by investing in the sustainable agricultural revolution.
Today, there are approximately 7.7 billion people on Earth, with the U.N. predicting this number to reach 9.8 billion by 2050, and just under 11 billion by 2100. To meet the total demand for produce, feed, fuel, meat, and dairy that will come with this increased population, it is estimated that farmers will have to completely double their total production in about 50 years, all while the amount of arable land is decreasing amidst a changing climate.
Research shows that with proper management and by incorporating hi-tech and sustainable approaches, farms could very well be able to double or triple their yields. But capital is required, and a lot of it.
This takes us to our mission: to bring creative and transformative capital to farming while opening up a vital asset class to all investors.
Helping farmers and landowners unlock the value of their land holdings means more abundant capital to invest into growth, innovation, and sustainable practices.
At the same time, it is our view that farmland can be a superior addition to most diversified portfolios. The data speaks for itself:
- Returns. Between 1992 and 2021, farmland provided average annual returns (income + price appreciation) of nearly 11%.1
- Stability. During this same time period, the volatility of farmland was just 6.7% (compared to the S&P 500’s 16.9%, privately owned real estate’s 7.7%, and US REITs’ 18.4%).2
- Diversification. With a -0.06 correlation to stocks and -0.24 to bonds (1992-2021), farmland returns have been negatively correlated to stocks, bonds, and broader market indices.3
- Appreciation. Since 2000, the NCREIF Farmland Income Index, which tracks the value of U.S. row and permanent cropland, has more than tripled. With the growing demand for food, coupled with decreasing arable land, farmland will only become more valuable over time.4
- Inflation Hedge. Farmland yield is inherently tied to food prices. The NCREIF Farmland Index’s Total Return has historically provided returns more than double the inflation rate since before 1992.5
- Safe-Haven. Like gold, farmland is also a scarce commodity. Unlike gold, the total supply of farmland is decreasing, and it offers investors both appreciation and income. We’re seeing that farmland is replacing gold as the go-to safe haven investment.6
FarmTogether is a win-win-win:
- More capital and more capital options for farm owners and farmers.
- More highly attractive investment options for investors.
- More farms managed sustainably = facilitating long-term food security.
Since the launch of El Nido in 2019, we have experienced tremendous growth and surpassed extraordinary milestones.
Today, we are approaching $200M in assets under management across 30+ farms, 6 states, and 14 crop varieties – from pears and pistachios to corn and citrus to our very first wine grape opportunity, Vista Luna Organic Vineyard. In 2021, we closed the largest single-asset crowdfunded farmland investment to date: a 201-acre organic redevelopment property located in Washington - a $21.3M deal (total deal size).
In addition to our flagship Crowdfunding product, we’ve launched two more channels to bring unparalleled farmland opportunities to our more than 1,600 investors: our Sole Ownership Bespoke Offering platform and, most recently, the Sustainable Farmland Fund.
Through our Bespoke channel, investors seeking sole ownership are able to benefit from the rigor of our sourcing and farm management teams, while having complete control over the capital structure and risk-return profile – allowing us to cater to an expanded set of investor needs. Our Sustainable Farmland Fund, launched in March 2022, enables access to a diversified portfolio of institutional-grade farmland through a single allocation. Geared towards both individual and institutional investors, our Fund opened the door to a new audience, further advancing our mission.
On the sourcing side, it has been incredible to see our internal AI tool, Terra, grow and evolve. Each month, our Terra team showcases a new feature or functionality – making it easier for our investment team to bring high-quality farms to our investors.
We have partnered with some of the most forward-thinking farmers and operators in the country, helping to scale both sustainable and organic operations across the US: Stemilt - one of the largest and most innovative apple growers in the world, Raptor Ag - the largest hazelnut grower in North America, and Farmland Opportunity - a leading row crop investor. They each chose to work with us because of the flexibility of our capital, professionalism, and integrity of our team.
Our team has also grown by leaps and bounds. Today, we are 30 strong and look forward to continuing to expand in 2023.
The Next Chapter
Over the last 6 months, I’ve had time to reflect on what’s next for FarmTogether, and what’s next for me as we take this company to the next stage. I’ve learned that what I enjoy most, and where I best succeed, is in building initial structures. I’m the guy to take something from 0 to 1. The visionary, the builder.
In my new role as Head of Strategy & Special Projects, I am able to lean into my core skill set: building new things from scratch. This is where I find passion and joy.
I will focus more directly on developing our long-term strategy and product roadmap. I will work closely with our investment team and our Terra AI teams to accelerate the adoption of tech in how we underwrite farms. As in any young company, I will still wear many hats. I will be focusing on building partnerships with new institutions, tapping into new geographies, fundraising, and developing new investment channels. I will also play a critical role in driving our culture.
FarmTogether is well underway in our mission to unlock the $10 trillion global farmland market, but there’s more to be done. We have the opportunity to drive billions of dollars in transformative capital to agriculture while providing even more investors with a truly remarkable asset class. In today’s environment, our mission has never been more important. In order to fully realize our mission, we must take the next step from a startup to a disciplined tech-enabled farmland asset manager – and this requires a different skillset and a fresh perspective.
As we look ahead to our next chapter, I have never felt more strongly about the future of the company with Jared at the helm as our next CEO.
Jared brings more than 20 years of experience in finance and asset management, having begun his career in the asset management divisions of JPMorgan Chase and Bank of America. He spent time in management consulting within Deloitte’s finance practice and, more recently, held senior finance roles at Nuveen, helping build out their international and alternative asset businesses. Jared spent six years in global real assets at Nuveen, supporting the operations and growth of the farmland and timberland businesses.
Beyond the impressive resume, Jared brings with him a sharp, disciplined, and operationally-focused approach. This approach will be paramount as we continue building a robust and scalable operating system across each vertical, from sourcing and farm management to accounting and operations.
Working alongside Jared, we will continue to build out a premier experience for our clients and partners.
A Look Ahead
So, what can you expect from us in the next few years?
You can expect more curated and expertly managed institutional-quality farmland investments. That’s our bread and butter, and that isn’t changing. We will continue to increase the number and diversity of offerings on the platform.
Internally, we will be investing heavily in our core operations to ensure a smooth client experience, from start to finish, as we scale. We will be focusing relentlessly on producing quarterly farm reports, distributions, and K-1s on a clockwork-like schedule as we continue to increase the number of farms we manage. We will additionally continue to invest in our sourcing engine, Terra, as we look to bring a more consistent pipeline of quality investment opportunities to the platform.
While FarmTogether is already present in seven of the leading agricultural states, there are many new markets we are excited about. In the coming years, we hope to expand into Florida, Texas, Arizona, New Mexico, and many other states. Additionally, we look forward to expanding our offerings across different commodities, further diversifying the FarmTogether Sustainable Farmland Fund, and exploring innovative on-farm technologies that will improve the productivity and resilience of our farms.
We want to introduce much more in the way of organic and regenerative farms. Those are farmers and farms at the cutting edge of our agricultural industry, capturing superior returns and moving the needle on healthy, delicious, and sustainably-grown food.
We have been honored to partner with visionary organizations like Franklin Templeton and Leading Harvest. In my new role, I will spend more time working on these transformative partnerships with organizations, both public and private, that align with our vision and mission.
I, Jared, and our team are honored and thrilled to be building FarmTogether together for you for many years to come.
Founder of FarmTogether
- Source: NCREIF Farmland Index
- Sources: Farmland Values - NCREIF Farmland Index; Real Estate Values - NCREIF Property Index; Stocks Values - S&P 500 Index; Publicly Traded U.S. REITs - FTSE Nareit U.S. Real Estate Index
- Sources: Farmland Values - NCREIF Farmland Index; Stocks Values - S&P 500 Index; Bonds Values - Bloomberg Barclays US Aggregate Bond Index
- Source: NCREIF Farmland Index
- Source: NCREIF Farmland Index; Consumer Price Index - Urban
- Source: NCREIF Farmland Index
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.