New investors range from local farmers trying to expand their orchards to international companies seeking high returns on prime almond farmland, experts say. Pension funds, insurance companies and retirement funds also are investing portions of their portfolios into agriculture. Olam International, a Singapore-based commodities supplier, farms 7,000 acres of almonds in California.
Nut land — almond, pistachio and walnut — is now the highest valued type in every county throughout the valley, according to the American Society of Farm Managers and Rural Appraisers' California chapter.
In Fresno County, almond land was valued at up to $18,000 per acre in 2012, and pistachio land at up to $25,000 per acre. That's higher than citrus, grape, or tree fruit land —and much higher than the $7,200 average per acre farm real estate value in California last year, according to the USDA.
Putting money in farmland pays off, said Biff Ourso, portfolio manager at the New York-based financial services firm TIAA-CREF, because it can generate an income and appreciate over time. But it also brings much-needed diversification.
"Farmland doesn't behave in the same pattern as other traditional asset classes," Ourso said, which means it reduces the risk for investors in case of a market downturn.
Investing in agriculture is attractive in the long term, he said, because of the growing world population, expanding middle classes and the fact that farmland is a finite resource. The company — which manages about 140,000 acres of farmland in the U.S., including almonds in California — leases its farm properties to farmers.
Local almond operators say heightened interest from investors spells out a bright outlook.
"There's lots of excitement in the industry," said Jim Crecelius, CEO of Montavista Farming Company based in Hanford.
Crecelius, an almond farmer, also processes the nuts for investors throughout the Valley and markets them in Asia. "We have never been able to completely supply every almond that our customers need," he said.
Some worry that the almond investment boom could lead to overproduction and hurt local farmers.
"Everybody in the industry is continually asking: are we in a bubble or is this a change of economies?" said Chuck Nichols, who farms over 1,000 acres of almonds and pistachios in Tulare and Kings counties. "We don't know the answer to that."
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