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Farmer Mac courts investors even with talk of farm bubble- report

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September 23
5:20 AM 2013

Government-sponsored Federal Agricultural Mortgage Co, also known as Farmer Mac, has continued wooing investors despite talk that farmland prices would fall next year. According to a Reuters report, Farmer Mac had been trying to convince small-cap fund managers, endowments and other institutions that they were a good investment. Farmer Mac is a secondary market for farm loans.

Farmer Mac Chief Executive Officer Timothy Buzby told potential investors that they offered a conservative form of investment in the booming farm sector in the US. Contrary to market expectations, Buzby said any decline in the prices of farmland would only have a minimal effect.He said farmers could always divest their assets off like their surplus equipment or a portion of their farm before defaulting. He told Reuters, "We only make real estate loans, not operation loans. If there's a bursting of a bubble, the last lender to get hurt is the one who has the loan on the farm."

This year alone, Farmer Mac had made seven presentations to possible investors, two of which were at the Bank of America/Merrill Lynch Global Agriculture Conference and the California Municipal Treasurers Association.

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