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 – Monetary Matters with Jack Farley

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 – Monetary Matters with Jack Farley — Transcript

Market views

Bullish

RICE— Rice prices at multi-decade highs with expected supply disruptions from Super El Niño affecting major producing regions (India, Southeast Asia). Global food stocks tight at 70 days (down from 110 days), California production down 40%, and rice is the most consumed calorie globally requiring massive water inputs.
COTTON— Cotton prices up nearly 30% in 2025, with diverse applications including textiles and military ammunition. Supply constraints and government support provide price floor.
FARMLAND— US row crop farmland, particularly in Mid South with irrigation and water rights, expected to converge with Midwest prices (currently 80-100% premium) as water scarcity becomes apparent. Mississippi Alluvial Aquifer has 300 years of water versus less than a decade for other regions. Negative correlation with stocks/bonds provides portfolio diversification.
WATER— Water rights expected to develop in Mid South within 10 years, following Colorado model where water rights outperformed S&P 500 over 30 years. Data center proliferation driving demand for water offsets, with hyperscalers approaching for voluntary programs.
CORN— Corn demand supported by growing biofuels/ethanol production and increasing protein consumption globally (3-5 parts grain needed per 1 part protein). Government support through price loss coverage provides floor.
SOYBEANS— Soybeans attractive due to lower input costs (particularly fertilizer), self-fertilizing properties, and renewed Chinese purchasing. Trading near $13/bushel with strong profit margins for farmers.
DEERE— John Deere positioned as technology company with precision agriculture leadership. Largest booth at Consumer Electronics Show, driving productivity improvements through targeted spraying and seeding technology.

Bearish

GLOBALFOOD— Global food security deteriorating with stocks declining from 110 days to 70 days over past decade. Arable land shrinking, water scarcity increasing, and Super El Niño threatening major disruptions in South America, Brazil, Argentina, Southeast Asia, and India.

Not investment advice.

Mentioned

Market views