The client
The client was a European-based private investment syndicate looking to diversify its portfolio through the acquisition of a large-scale agricultural asset in the United States. The client’s investment strategy focused on creating long-term value from productive farmland.
Like many institutional and private investors, the client viewed farmland as an attractive long-term asset class that offered capital appreciation together with operating income and inflation protection.
The problem
The investment syndicate had identified a 16,000-acre dryland farming operation in Colorado as a potential acquisition. Approximately 20% of the property was under arable crop production, with the remaining land utilised as pasture, creating opportunities for both operational optimisation and gradual land-use conversion.
Before committing significant capital, the investors required an independent technical, commercial and ESG assessment of the asset. They needed to understand whether the farm could generate attractive long-term returns under a range of production and market conditions, while also identifying the principal operational and investment risks.
In addition to assessing the productive potential of the land, the client required a detailed financial model that would cover alternative cropping scenarios, account for the impact of climate variability, and assess machinery investment options. Naturally, a farmland acquisition of this scale also necessitated a clear-eyed view of operating costs and financing requirements, as well as support engaging with lenders to secure acquisition finance and ongoing working capital facilities.
The solution
Farrelly Mitchell undertook a comprehensive technical, commercial, and ESG due diligence assignment designed to provide the client with a complete understanding of the farm’s investment potential, operational risks, and future financial performance.
Phase 1
Our team completed a detailed technical assessment of the property using satellite imagery, GIS mapping, and land capability analysis. Using this we were able to evaluate existing land use, soil quality, and opportunities for future development.
We assessed soil characteristics, historical climate patterns, rainfall variability, and production capability across the farm. Multiple crop scenarios were developed, including wheat, sunflowers, millet, and other suitable dryland crops, with each evaluated against projected yields, agronomic suitability, and commodity market outlooks.
Alongside the technical review, we assessed the farm against key ESG considerations, including land stewardship, soil health, sustainable production practices, and long-term resource management.
Phase 2
Building on the technical assessment, we developed a series of integrated financial and operational models to evaluate the investment under a range of scenarios.
Alternative cropping programmes were modelled using varying assumptions for climate conditions, yields, commodity prices, and input costs. Machinery ownership was assessed against contract hire and leasing options to determine the most efficient capital allocation strategy.
Our team also engaged directly with agricultural lenders to assess debt financing options for the acquisition and ongoing working capital financing. Various financing structures were incorporated into the financial models to evaluate their impact on cash flow, returns, and investment risk.
The assignment concluded with a comprehensive red flag assessment, supported by detailed financial forecasts, risk and return scenarios, and a clear go/no-go recommendation for the client.
The impact
The project provided the investment syndicate with a robust, evidence-based assessment of both the opportunities and risks associated with the proposed farmland acquisition. Rather than relying solely on vendor information, the client was able to evaluate the investment using independently verified technical, operational, and financial analysis.
The integrated models demonstrated how changes in climate, yields, commodity prices, input costs, and financing assumptions could influence long-term investment performance. They allowed the investors to understand both downside risks and value creation opportunities before committing capital.
The engagement also enabled discussions with lenders by providing independently developed financial forecasts and clearly articulated funding requirements for the farmland acquisition.
Most importantly, the project provided the client with a clear investment recommendation supported by quantified evidence across technical, commercial, financial, and ESG considerations. This enabled the syndicate to make its investment decision with confidence and a comprehensive understanding of the asset’s long-term performance potential.
Forge ahead with Farrelly Mitchell
At Farrelly Mitchell, we combine technical expertise, commercial insight and rigorous financial analysis to help investors make confident, evidence-based investment decisions across the global food and agribusiness sector.
Whether you’re planning a farmland acquisition, evaluating agricultural infrastructure, assessing ESG performance or securing acquisition finance, our multidisciplinary team provides the independent due diligence and strategic advice needed to minimise risk and maximise long-term value.
From technical assessments and financial modelling to investment appraisals, ESG due diligence and lender support, we deliver the insight needed to enable successful investment decisions.
To learn more about how we can help your organisation achieve its strategic objectives, contact us today.
