Masters in Business

Ceres Partners CEO Brandon Zick on How Private Equity Invests in Farmland

November 7, 2025

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  • Farmland investing, particularly in Midwest row crops, is characterized by highly dispersed ownership, zero vacancy, and an inefficient rental market, creating opportunities for active institutional management to add alpha through CapEx and superior deal sourcing. 
  • Farmland serves as a strong inflation hedge due to its positive correlation with inflation and historical average capital appreciation of about 6% annually, driven by productivity gains. 
  • The investment thesis for Ceres Partners focuses on row crops over permanent crops due to lower risk and a cleaner alignment with investment objectives like current income, inflation correlation, and capital appreciation, while also capitalizing on non-agricultural revenue streams like mineral rights, solar, and wind leases. 
  • Agricultural technology is rapidly advancing, utilizing tools like satellite imagery, drones, and AI for variable-rate application of inputs to increase productivity and reduce waste, which Ceres Partners seeks out in its farmer partners. 
  • Farmland investing requires active management and manager selection, as there is currently no passive indexing option (like a Vanguard or Wisdom Tree for farmers), meaning alpha generation relies on picking the right operator. 
  • Brandon Zick credits his parents' emphasis on education and encouraging him to pursue opportunities outside the family farm, alongside mentors like Arthur Lev and founder Perry Beath, for shaping his career path. 

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Brandon Zick’s Background
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(00:01:53)
  • Key Takeaway: Zick’s upbringing on a Pennsylvania dairy and crop farm instilled a strong work ethic, leading him away from farming labor toward finance.
  • Summary: Growing up on an active family farm required waking up around (4:30) AM for milking, instilling values of hard work. Zick studied finance and Japanese at Notre Dame, initially planning a career outside of farming. His early career included analyst roles at Lehman Brothers and Morgan Stanley, where he developed valuation and transaction experience.
Transition to Farmland Investing
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(00:05:00)
  • Key Takeaway: The desire to move to the buy-side, combined with valuation skills, prompted Zick to seek out the niche asset class of exclusive farmland investment.
  • Summary: Zick sought a path to private equity, realizing few firms invested exclusively in agriculture. He applied his valuation and transaction experience from Morgan Stanley to agriculture, seeking an investment angle rather than the labor side. This led him to connect with Ceres Partners’ founder, Perry Veith, through an introduction from a Notre Dame contact.
Joining Ceres Partners
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(00:10:47)
  • Key Takeaway: Zick joined Ceres Partners in 2010 when it managed only $30 million in assets, confident in the differentiated skill set he would develop even if the venture failed.
  • Summary: Ceres Partners had only $30 million in assets and $17 million in equity when Zick joined, accepting a lower initial salary. He was reassured by the ability to know immediately if the small shop was failing and the value of developing a unique skill set in farmland investment. The firm relocated to South Bend, Indiana, in December 2010 to build momentum.
Farmland as a Unique Asset
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(00:12:48)
  • Key Takeaway: Farmland ownership in the Midwest is highly dispersed among family farmers (about 40%), with institutional ownership at only about 3%, resulting in virtually zero vacancy.
  • Summary: Unlike rolled-up real estate sectors, farmland lacks institutional consolidation, making it more comparable to timber assets. Active family farmers own the majority of U.S. farmland, while institutional investors hold a small fraction. Every farm that can be farmed is farmed annually, and the total pile of U.S. farmland shrinks yearly due to development and conservation.
Farmland Investment Economics
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(00:25:42)
  • Key Takeaway: Gross rental yields on Midwest row crop portfolios range from 4% to 5%, with total returns targeting 8% to 10% net through a cycle, combining rent with historical 6% average appreciation.
  • Summary: The gross rental yield on Midwest portfolios is typically 4.5% to 5.5% upon purchase, derived exclusively from rent. Land in the Chicago Fed 7th District generally trades at an implied cap rate of 1.5% to 2.5%, usually to neighboring farmers. Active management adds alpha by capitalizing on inefficient sales and implementing CapEx like irrigation to increase rent and land value.
Alpha Generation Beyond Rent
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(00:30:02)
  • Key Takeaway: U.S. landowner rights allow for significant revenue enhancement through mineral rights, and solar leases can generate 3 to 5 times the income of standard farm rent.
  • Summary: The landowner generally owns mineral rights in the U.S., which can be lucrative, as seen with the Marcellus shale impact in Pennsylvania. While wind turbine leases offer only a mild incremental revenue increase, solar leases can provide 15% to 25% annualized income during option periods, far exceeding typical farm rents. Ceres structures its fund as evergreen to align with the long-term needs of farm tenants.
Lease Terms and Scale
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(00:34:42)
  • Key Takeaway: The standard lease term for Midwest row crops is three years, viewed as long-term by farmers who often prefer shorter leases for optionality to sell property.
  • Summary: Ceres targets three-to-five-year leases, with three years being the majority for row crops due to market transparency. Farmers often operate on one-year leases with other landlords, valuing the optionality to sell. Specialty crops, like potatoes or processing tomatoes, justify longer eight-to-ten-year leases because they require longer planning and yield stronger rent.
Competition and Farmer Strategy
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(00:37:31)
  • Key Takeaway: Farmers prioritize protecting and growing their acreage, often using proceeds from selling high-value development land (like to data centers) via 1031 exchanges to buy more farmland.
  • Summary: Land value differs based on the intended crop; for instance, land suitable for specialty crops can command nearly double the rent compared to corn/soybean use. Farmers view losing acres as increasing their per-acre farming cost, driving them to protect their base. Competition for land often comes from farmers executing 1031 exchanges after selling acreage to high-paying buyers like data centers.
Farmland Risks and Climate
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(00:53:45)
  • Key Takeaway: The primary investment risk mitigation strategy involves selecting Midwest locations with superior soil, plentiful water resources (like Great Lakes aquifers), and partnering with large-scale, technologically advanced farm tenants.
  • Summary: Farmers face significant pricing power disadvantages against input suppliers and large grain buyers, making tenant selection crucial for Ceres. The Midwest is favored for its reliable rainfall and water resources, minimizing drought risk compared to the South and West. Ceres actively seeks farmers who utilize technology like variable-rate application to maximize yield and minimize input waste.
Future Opportunities and Technology
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(00:57:52)
  • Key Takeaway: Future opportunities involve high-revenue specialty crop production shifting east of the Mississippi to reduce freight costs, while technology adoption continues to drive productivity gains.
  • Summary: High-revenue crops are expected to move eastward, becoming cheaper to produce than imports from Mexico due to lower water and freight costs in the Midwest. Technology, including GPS-driven equipment and soil mapping, allows for variable-rate application of seeds and fertilizer, significantly increasing efficiency. Farmers are highly sophisticated in using technology to manage diverse soil types across their acreage.
Technology Driving Farmland Productivity
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(01:00:28)
  • Key Takeaway: Variable-rate application, informed by soil mapping and satellite data, optimizes seed and fertilizer use across diverse soil types on a single farm.
  • Summary: Agricultural technology is advancing rapidly due to pressures from high labor costs and input expenses. Farmers are using soil mapping, satellites, and probes to identify soil diversity, sometimes finding five to a hundred different soil types per farm. This allows for variable-rate application of inputs, such as planting 35,000 seeds on high-quality dirt versus 20,000 on sandier soil to achieve the same yield while saving money.
Smart Irrigation and Operator Sophistication
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(01:01:54)
  • Key Takeaway: Modern irrigation pivots are now remotely managed via smartphones, often integrated with soil moisture probes and AI to optimize water use based on predicted weather.
  • Summary: Irrigation pivots, once requiring multiple manual checks, can now be controlled, started, and stopped from a farmer’s iPhone. Soil moisture probes provide real-time data on irrigation needs. Some systems incorporate AI or learning mechanisms that prevent irrigation if rain is forecasted, making operators smarter.
Misconceptions About Farmland Investment
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(01:02:51)
  • Key Takeaway: Investors often overlook the high level of sophistication among modern farmers, failing to differentiate between leading operators and others.
  • Summary: Most people paint agriculture with too broad a brush, failing to recognize the sophistication of the farmers leading the industry. Ceres Partners focuses on partnering with these leading operators to generate the best returns. While more money is entering farmland investing via crowdsourcing and REITs, inefficiency still exists, requiring active manager selection rather than passive indexing.
Mentors Shaping Investment Career
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(01:04:16)
  • Key Takeaway: Brandon Zick credits his parents’ encouragement to pursue education outside farming, along with key professional figures like Arthur Lev and founder Perry Beath, for his career development.
  • Summary: His parents, both well-educated and growing up on dairy farms, encouraged their six children to pursue careers outside the family farm, noting that farming was not a long-term financial strategy. Arthur Lev at Morgan Stanley strongly advocated for Zick to join Ceres. Zick highly respects founder Perry Beath for successfully pivoting from fixed income management to building the firm.
Recommended Reading Material
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(01:06:34)
  • Key Takeaway: Water management history and the impact of social media on youth mental health are key areas of current reading interest.
  • Summary: Zick frequently reads ‘Water: The Epic Struggle for Power and Civilization,’ which details how civilizations succeeded based on water access and treatment. He recently finished ‘The Anxious Generation,’ finding it eye-opening regarding social media’s impact on life, leading his high school to ban cell phones.
Media Consumption Habits
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(01:07:44)
  • Key Takeaway: Podcast listening, especially business and sports content, dominates Zick’s media consumption during travel time, with ‘The Wire’ being a favorite re-watch.
  • Summary: Due to significant windshield time, Zick listens to many business podcasts, including ‘Invest Like the Best’ and those by Meb Faber and Barry Ritholtz, alongside Ringer sports podcasts. On streaming, he re-watches ‘The Wire’ annually and is currently watching the conceptually fascinating show ‘Severance’.
Advice for Aspiring Farmland Investors
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(01:08:32)
  • Key Takeaway: Building a genuine, broad network is the most crucial step for recent graduates entering alternatives or farmland investing, as opportunities often arise unexpectedly through referrals.
  • Summary: Building a network is paramount because there is always someone better at any specific skill like modeling or investing. Networking must be genuine, as opportunities can emerge from unexpected references, such as asking an endowment contact for a reference check. Many successful portfolio managers at Ceres grew up on farms and transitioned to finance, bringing a strong work ethic.
Lessons Learned in Farmland Acquisition
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(01:10:05)
  • Key Takeaway: Ceres Partners now exclusively uses cash purchases with no leverage, a conservative approach that prevented losses during downturns, contrasting with earlier strategies that sometimes required modest leverage.
  • Summary: Looking back, Zick regrets missed acquisition opportunities more than actions taken. Today, Ceres purchases properties entirely with cash, maintaining a strong balance sheet without leverage. Farmland financing is conservative, typically requiring 50% or 60% down, unlike other asset classes. This conservatism allowed the firm to grow steadily without being burned by market disasters.