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TIAA-CREF, U of I center to study farmland values & sustainability
Illinois Correspondent

URBANA, Ill. — What are the primary factors that affect farmland prices, and how can they be sustained for profitability?

Those are the questions researchers and educators at the University of Illinois at Urbana College of Agricultural, Consumer and Environmental Sciences (ACES) will attempt to answer with the launch of the new TIAA-CREF Center for Farmland Research.
The center, which opened March 13, was created to enhance the university’s research and educational initiatives for its students and the agricultural community by conducting research and hosting academic symposiums focused on farmland and the financial aspects of farm management, according to professor Paul Ellinger, a department head and administrator for the center.

“The center was created to stimulate interest and research. TIAA-CREF is investing to bring people together that have common interests, and (use ACES) research with the focus on issues related to farmland values. It’s an investment in people,” said Ellinger.
TIAA-CREF was established in 1918 under the vision of Andrew Carnegie and is recognized as a world leader in financial services, including managing investment assets, according to company information. TIAA-CREF currently owns or manages approximately $4 billion in farmland properties totaling more than 1 million acres in the U.S. and abroad, typically leasing farmland to local producers.

Funding from TIAA-CREF used to establish the Center for Farmland Research will be utilized in multiple ways in conjunction with its agreement with U of I.

“One way is to target research that relates to farmland economics and the issues that relate to what drives farmland prices, whether it be taxation, budgets, commodity prices, land rents or other factors,” said Ellinger. “Just to be able to devote deeper research and develop databases on things like farmland sales will help us to better answer these questions.”

Developing tools to identify factors affecting farmland sales and values will be the primary focus of the center. Distributing the results of the center’s research to a wide spectrum of stakeholders and the public through newsletters and websites such as U of I’s and Farmdoc’s daily service is an ancillary goal.
“The community of stakeholders – farmers and those interested in what affects farmland prices – will be impacted,” Ellinger said. “Our primary interest is to advance research and science and create that for a wider stakeholder group.”

A spokesperson for TIAA-CREF said the group shares a long-term perspective and commitment to agricultural research with U of I. “We are proud to collaborate with the university on this venture, which will generate more of the sophisticated research needed to drive long-term and sustainable practices by institutional investors, businesses and farmers,” said Heather Davis, head of TIAA-CREF’s global private fixed income and equity investments.

“Sustainable practices help ensure that farmers increase productivity to meet rising demand for food around the world, while maximizing land values over the long term.”

An advisory board comprised of TIAA-CREF and U of I representatives will provide guidance for the center, whose principals aim to improve sustainability, transparency and accountability of investments in farmland, in accordance with TIAA-CREF’s pledge as a signatory to the United Nations Principles for Responsible Investment.

TIAA-CREF had $502 billion in assets under management as of Dec. 31, 2012, according to the organization.

“(TIAA-CREF) will have better transparency through their investment, with a lot of new information available to people within that investment community,” Ellinger said. “They would like to advance the amount of data available so that people who invest in farmland property are making decisions based on sound data and research.”

U of I officials and TIAA-CREF share the vision that ongoing investment in agriculture is increasingly important to meeting future demand for food, fiber and fuel for a population expected to require a 25 percent boost in agricultural production by 2030, according to a joint statement.

“Farmers, educators and investors rely upon the (U of I) for leading-edge agricultural research,” said Robert J. Hauser, dean of the College of ACES. “The TIAA-CREF Center for Farmland Research will help us create the tools needed to promote sustainable and innovative agricultural practices and maintain our status as the premier source for farmland research.”