CFD 456 – Agricultural Investing with Harvest Returns

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In 2016 Chris Rawley, while visiting a farm investment in Central America, conceived the idea of building a crowdfunding platform to streamline agriculture investment. He soon founded Harvest Returns to bring that vision to reality. Rawley has held corporate management roles in Jones Lang LaSalle, Electronic Data Systems, L-3 Communications, and served as a defense consultant at Special Operations Command headquarters with Blackbird Technologies. He has invested in real estate and income-producing agriculture for nearly two decades.

Austin Maness, as COO, manages all facets of the company’s logistics, deal flow, and human resources. Some of Austin's greatest memories were spent summers as a kid working with his grandparents on their small farm. During a ten year career as an US Army Officer, he served at several levels of command from tactical to strategic operations. While deployed to Iraq and Afghanistan, Maness conducted countless combat operations as well as cultivated relationships with local governing officials in support of mission objectives.

Podcast Highlights

Who are Chris and Austin?Chris grew in a family of real estate entrepreneurs so business was in his blood. He began by investing in single family homes and that eventually developed into agricultural investing.

Austin refers to himself as a bit of a country bumpkin and his family has been involved in farming in some way for generations. In the Army, Austin developed his sense of service to others and that has lead him to his current endeavor.

What is agricultural investing?There are good subsidies and favourable terms for loans for many kinds of agriculture but the more recent developments like aquaculture and vertical farming are not well served by the existing system, vertical farming is a method of urban farming that involves very little space, oftentimes at 10x the production efficiency.

Emerging markets don’t have the same opportunities that traditional farmers have and that’s the sector Chris and Austin are trying to serve.Agriculture is changing and what is being provided to the world is evolving, which is part of the reason Chris and Austin believe it’s a good investment opportunity.

Sustainability is a big aspect of the investment, there are many different ways that investing in this kind of agricultural investment that helps preserve the ecological environment.

The majority of farming practices are not considered organic because of the chemicals and antibiotics involved. In order to convert land to organic, the process is very involved but it leads to a better product and puts less stress on the land. The difficulty is the process is time intensive and capital intensive.

How is agricultural investing similar to apartment buildings?

The first similarity is cultural, just like everyone needs a place to live, everyone needs to eat.

A farm is like any other business and it can evaluated in much the same way. There is also another likeness in the economies of scale involved.How big is a small scale farm?

A small scale farm would be looking for funding in the range of $500 000 to $5 million. They are typically family farms that are looking to scale up.

Harvest ReturnsHarvest Returns is an online platform that brings investors together to invest in a larger project than they would be able to individually.Most people don’t want to write a check and buy their own farm. The low minimum is about democratizing agricultural investing and allowing more people to be involved in the process.

Most people don’t invest in the agricultural asset class mainly because they don’t understand it and don’t know how. Harvest Returns allows you to dip your toes in while diversifying your portfolio.

Typical returns of US farmland have exceeded the S&P 500 over the long term, they are also generally positively correlated to inflation while being negatively correlated to other assets like stocks and bonds which allows you to hedge your portfolio against the rise and fall of the market.

Chris and Austin’s Takeaway

If you want to diversify your portfolio, come to us and get started. Start doing your research if your dream is to start your own agricultural operation, traditional or non-traditional, and give Chris and Austin a call when you are ready to make it a reality.

Links:Harvestreturns.comThank you for listening! If you enjoyed this podcast, please subscribe to the show on iTunes!

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