Sep 11, 2026 · 1h 14m
Water-rich farmland emerges as a scarce real asset
Why Farmland With Centuries of Water Is the Ultimate Scarce Asset | John Farris of LandFund Partners on Super El Niño, Food Security, and the Sources of Alpha in Farmland
Reliable groundwater, slowing agricultural productivity, and rising food demand are reshaping how investors assess farmland and food security.
- 1Rising protein consumption and tighter stockpiles are increasing pressure on global grain supplies.
- 2Land Fund Partners targets irrigated Mid-South farmland where long-lived groundwater creates value beyond crop yields.
- 3Regenerative practices, crop flexibility, and alternative land uses can strengthen farmland economics despite weather risk.
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John Farris says Land Fund Partners estimates its average farm has roughly 300 years of groundwater at current draw rates.
The brief
Jack Farley and John Farris frame farmland as an underappreciated real asset, linking rising protein demand and shrinking arable land to tighter food supplies.
Farris argues that productivity gains are slowing while weather and water constraints intensify, making reliable irrigation increasingly central to agricultural output.
Land Fund Partners focuses on irrigated Mid-South farms above the Mississippi alluvial aquifer, where groundwater stewardship and infrastructure support long-term value.
The firm estimates its average farm has roughly 300 years of water at current draw rates, a resource profile that distinguishes farmland from finite mining assets.
Beyond crops, the strategy includes regenerative farming and optional uses such as recreational, environmental, and development-related opportunities, while climate risk remains unavoidable.
What was said on this episode
42 statements · 29 positive · 12 negative · 1 neutral
Populations rarely reduce protein consumption without major social disruption.
“once populations move up the protein scale, they rarely move back down without massive unrest, civil unrest, war”
Listen at 3:08
Global food stocks cover roughly 70 days, down from 110 days a decade ago.
“currently that sits around 70 days. 10 years ago was 110 days.”
Listen at 4:36
Super El Niño could cause major food-supply-chain disruption.
“we could see some major disruption in supply chains”
Listen at 4:57
Water-rich irrigated farmland will become increasingly important to global food supply.
“irrigated farmland with water. Is it going to be a bigger and bigger part of that equation?”
Listen at 5:09
California was the leading U.S. rice-growing state until the current decade.
“California, for the last five decades, has been the largest rice growing state up until this decade.”
Listen at 6:37
California rice acreage has declined to roughly 200,000–300,000 acres this decade.
“Now they do closer, this decade, it's closer to 200,000 to 300,000 acres of rice. produced in California.”
Listen at 6:53
Agricultural production has plateaued or declined over the past five years.
“we've sort of hit that plateau in the last five years actually the amount of production has shrunk in the last five years”
Listen at 9:17
Agricultural technology has improved yields and will continue helping production.
“technology has helped a lot and i think it will it will continue to help”
Listen at 10:20
Many U.S. indoor hydroponic farming companies have gone bankrupt.
“Many of those companies are now bankrupt.”
Listen at 10:59
Land with reliable water will become increasingly important and valuable.
“land with water will become a more and more important and valuable resource.”
Listen at 11:34
Irrigated Mid-South farmland can withstand weather events while maintaining crop output.
“if you have irrigated land like we do in the Mid-South, you can withstand weather events and still have a plentiful crop.”
Listen at 14:41
Irrigation investment can add $2,000–$3,000 per acre to farmland value.
“we may spend a thousand dollars an acre putting an irrigation system in. And that's worth to the land $2,000 to $3,000 an acre”
Listen at 15:35
Western U.S. water rights outperformed the S&P 500 over the past 30 years.
“water rights, just the chart of those water rights, they've actually outperformed in the last 30 years the S&P 500”
Listen at 18:07
Data-center growth will increase demand and value for Mid-South water rights.
“We believe water rights will come our way to our area of the country because of the proliferation of data centers and other users that need to account for.”
Listen at 18:26
Power generation for data centers can use 100 times their direct water consumption.
“the power that it requires to power a data center often uses 100x amount of water that the actual data center uses”
Listen at 19:12
Water-use regulation will emerge within ten years and benefit efficient farmers.
“I think that that's coming in the next 10 years and really only going to benefit those farmers who know how to. uh use the water on their ground really efficiently”
Listen at 22:07
Water-use offsets and conservation will eventually become legislated.
“I think soon as these things go, we'll be hopefully legislated so that we can protect our water source.”
Listen at 22:58
The Mississippi Alluvial Aquifer combines the most abundant water source with high-quality farmland.
“the Mississippi alluvial aquifer where we are has the most abundant water source with high quality farmland there is.”
Listen at 24:36
The firm’s target alluvial-aquifer farmland market is worth about $100 billion.
“there's $100 billion worth of high quality farmlands sitting on the alluvial aquifer in the area that we like to buy.”
Listen at 25:59
Regenerative farming can raise net income 30%–40% after three years.
“after three years the soil is so rich that you cut down on inputs you have higher yields, and therefore your net income is oftentimes 30% to 40% more”
Listen at 32:04
Regenerative farming reduces earnings during its first couple of years.
“For the first couple of years, you're going to lose money.”
Listen at 32:26
Cover cropping costs roughly $50–$100 per acre initially.
“it cost somewhere between 50 and 100 an acre to do that”
Listen at 33:40
Regenerative farming raises farmer incomes and supports higher farmland rents.
“it's resulted in higher incomes for our farmer and therefore they're willing to pay more to rent”
Listen at 34:51
Food security is a critical policy objective justifying agricultural subsidies.
“food security like is a very critical thing”
Listen at 36:29
Not every farm can economically or physically convert to rice production.
“not every farm can be a rice farm.”
Listen at 46:10
Furrow-irrigated rice reduces water use without reducing yields.
“we've had the benefit of teaching some of our farmers to furrow irrigate rice, which cuts down on water use”
Listen at 46:30
China has resumed soybean purchases.
“China's began purchasing again”
Listen at 49:37
Rice prices or exposure will remain favorable for the next couple of years.
“Long rice will be for the next couple of years.”
Listen at 52:36
Shrinking arable land would support a long rice position for decades.
“If you see continued shrinking of arable until it lands, probably long rice for several decades.”
Listen at 52:40
Solar developers may pay roughly $25,000 per acre for suitable farmland.
“they're willing to pay us roughly $25,000 an acre, which is three times.”
Listen at 54:49
Mid-South farmland prices may converge with Midwest prices within five years.
“hopefully we think that's coming in the next five years, prices per acre, because we think our land is superior.”
Listen at 1:00:50
Government-backed lending programs allow lenders to finance up to 55% of farm value.
“Our lenders, because of government-backed programs, will lend up to 55%.”
Listen at 1:01:50
U.S. row-crop farmland is negatively correlated with stocks and bonds.
“a u.s road crawl farmland it is negative correlated both to the stock and the bond market.”
Listen at 1:04:27
Farmland is suitable for 5%–10% of an investment portfolio.
“it's perfect for five to 10% of your portfolio.”
Listen at 1:05:00
Farmland increased in value during major stock-market drawdowns.
“the drawdowns on those were significant, north of 60, 70% on some levels. The same time, so you had that drawdown at the same time, farmland increased in value.”
Listen at 1:05:49
Super El Niño will bring hotter, drier conditions to Brazil and Argentina.
“It's areas like South America, Brazil, Argentina that we believe will feel the effects of the dry heat, drier and hotter with lack of precipitation.”
Listen at 1:08:27
Super El Niño effects should develop over the next six to nine months.
“it should really play out over the next six to nine months”
Listen at 1:09:09
Continued productivity and technology gains are needed for future food supply.
“we're hopeful that certain productivity and technology continues to happen.”
Listen at 1:09:48
Long-term demand outlook is strong for corn, soybeans, cotton, and rice.
“the forecast for all of them is strong.”
Listen at 1:11:43
Rice is likely to outperform in the short run if expected conditions occur.
“in the short run, we've mentioned rice being longer rice based on certain things play out like we expect them to.”
Listen at 1:11:46
Government policy may increase corn’s role in fuel production.
“The government does seem to be more interested in having corn be a bigger part of the fuel and electricity or fuel equation.”
Listen at 1:11:56
Demand for the four major crops is unlikely to shrink over the next 20 years.
“don't see anything shrinking if anything”
Listen at 1:12:36
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