PodcastThe Monetary Matters NetworkJohn Farris

“Super El Nino” Jeopardizes Global Food Supplies In 2026 | John Farris of LandFund Partners

The discussion examines how tighter food stocks, rising protein demand, constrained land and water, and the risk of a super El Niño could increase pressure on global agricultural supply chains. It also focuses on Mid-South farmland, including its water resources, valuation discount to Midwest land, alternative uses, and potential diversification benefits. Farris expects irrigated land and rice prices to gain importance, while Mid-South farmland prices could move closer to Midwest levels over the next five years.

CommoditiesGeopolitical RiskReal Estate

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Key Takeaways

Farris links the Mid-South’s farmland opportunity to durable water access: irrigated farms in his portfolio have roughly 300 years of water at current draw rates, versus less than a decade in some areas, and he expects irrigated land to gain value as investors recognize its lower weather dependence. He also compares groundwater to a mine and estimates Mid-South water could be worth billions using Colorado’s per-acre-foot benchmark, while acknowledging that comparison may be a stretch and that the value is not currently recorded on the fund’s books.

Farris sees a potential valuation-convergence trade in Mid-South farmland: the comparable Midwest row-crop premium narrowed from about 140% in 2013 to roughly 80% to 100% today, and he expects Mid-South prices could move closer to Midwest levels over the next five years. He considers the region less recognized despite viewing its land as superior.

Water scarcity is creating both regulatory and alternative-use value for Mid-South farmland. Louisiana, Arkansas, Mississippi, and Tennessee are monitoring groundwater more closely, while Farris expects improved measurement could eventually support overuse charges and fee-based water-offset or usage-rights markets; data-center power demand could also use roughly 100 times as much water as the data center itself.

Global food resilience is weakening as demand rises: the population is projected to grow from roughly 8 billion toward 10 billion, higher protein consumption requires three to five parts of grain per part of animal protein, and food stocks have fallen from about 110 days of supply a decade ago to roughly 70 days today. Farris warned that a super El Niño could put additional stress on food supply chains.

Rice is a particularly exposed crop because California acreage has fallen from roughly 500,000 acres annually to about 200,000–300,000 acres, while a super El Niño could bring drier conditions and a weaker monsoon to India and other major producers. Farris therefore identifies rice as having the greatest potential for an upward price spike, although the impact could begin this fall and early next year.

GEO-POLITICS

Farm Support — According to Farris, the One Big Beautiful Bill increased coverage ratios by roughly 15% to 30% on average across Land Fund Partners’ four major crops. It also maintains those price and support levels through 2032, providing stability during trade conflicts and commodity-price declines.

“And the one big beautiful bill, those coverage ratios went up by an average of, let's say, 15 to 30% across the four major crops that our farmers grow in…”—

TECHNOLOGY

Data Center Water — According to Farris, data centers could increase the value of water underlying Mid-South farmland. The power needed to operate them can use roughly 100 times as much water as the data center itself.

“But the power that it requires to the little dirty secret is the power that it requires to power a data center often uses a 100x amount of water that…”—

ECONOMY

Groundwater Regulation — Louisiana, Arkansas, Mississippi, and Tennessee are monitoring groundwater use more closely. Farris expects better measurement could lead to charges for overuse and eventually legislation supporting fee-based water-offset or usage-rights markets.

“And you know, if you think of it like a big basin, you could theoretically be drawing water that's needed at another part of the aquafer if you're draw overusing…”—

MARKETS

Protein Demand — Global food demand is rising as the population grows from roughly 8 billion toward 10 billion and consumers demand more protein. Available land and water are constrained, while animal protein requires roughly three to five parts of grain for each part of protein.

“So you have this you have this population boom of people moving up the protein scale and at the same time in Asia in the mid90s you started to see…”—

Tight Food Stocks — Global food stocks have fallen from roughly 110 days of supply a decade ago to about 70 days today, leaving less buffer against disruption. Farris warned that a super El Niño could create major food-supply-chain stress.

“So more people eating more protein with less land. So how does that work?…”—

Rice Production Shift — California rice acreage has declined from roughly 500,000 acres annually to about 200,000–300,000 acres in the current decade. Water constraints and development incentives make it more profitable for some farmers not to plant, while Arkansas has become the largest U.S. rice-growing state.

“California for the last five decades has been the largest rice growing state up until this decade. They had the water, they had everything you need…”—

FORECASTS

Irrigated Land Upside — Farris expects irrigated agricultural land could gain value relative to Midwest farmland as investors recognize the importance of long-term water access and reduced weather dependence. He compares groundwater to a mine.

“And I think that's what's going to happen as it comes to light that you know how important you know long-term water use and source and not being reliant on…”—

Rice Price Spike — Farris identifies rice as the crop with the greatest potential for an upward price spike because stocks are tight, rice is the world’s most consumed calorie, California planting has declined, and rice requires substantial water.

“Yeah, for sure. you know rice is the most consumed calorie in the world and when you take out supply we talked about food stocks being tight…”—

Intro on John Farris and LandFund Partners

John Farris explains his World Bank background, LandFund Partners’ focus on irrigated Mid-South farmland, and the investment thesis linking water, food security, and long-term agricultural demand.

70 Days of Food Reserves?

The speakers assess declining global food reserves, noting stocks have fallen from roughly 110 to 70 days while population growth and protein consumption increase pressure on supply.

Super El Niño Risk in 2026

Farris warns that a potential 2026 super El Niño could disrupt rice production and global supply chains, especially in India and other monsoon-dependent regions.

Iowa vs. the Mississippi Alluvial Aquifer

Farris compares Iowa’s expensive, largely rain-dependent farmland with the Mississippi Alluvial Aquifer, emphasizing the Mid-South’s irrigation, crop diversity, and valuation discount.

Beating NCREIF and the S&P 500: The Playbook

Farris describes LandFund’s value-add strategy: acquiring farmland below Midwest prices, installing irrigation, improving operations, and generating returns that have exceeded major benchmarks.

Water Reserves in Mississippi Alluvial Aquifer Are Immense

The Mississippi Alluvial Aquifer provides shallow, replenished water beneath LandFund’s farms, supporting 93% irrigation and reducing dependence on weather compared with many competing regions.

"300 Years of Water at Current Draw Rates"

Farris estimates the aquifer contains roughly 300 years of water at current draw rates, a potentially transformative resource whose value is not yet reflected in farmland prices.

Improving the Land and Regenerative farming

LandFund improves acquired properties through irrigation, leveling, grain infrastructure, and regenerative practices intended to raise productivity, soil quality, and long-term asset value.

Farm Subsidies and the One Big Beautiful Bill

Government subsidies and the One Big Beautiful Bill support farm revenue and commodity price floors, strengthening food security and reducing the impact of weather and trade shocks.

Crop rotation: cotton, corn, rice, soybeans

Farmers rotate cotton, corn, rice, and soybeans according to prices, yields, input costs, equipment constraints, crop insurance, and the economies of scale available to larger operators.

Is rice the trade right now?

Rice appears attractive because of tight supply, high consumption, water constraints, and potential weather disruptions, although only suitably leveled and equipped farms can convert to rice.

Soybeans, fertilizer, and China buying again

Soybean acreage benefits from relatively low input requirements and renewed Chinese buying, while fertilizer prices and expected returns influence planting decisions across crops.

Rice at all-time highs

Rice prices have reached unusually high levels as reduced planting, limited global stocks, water requirements, and possible El Niño-related production losses converge.

Optionality beyond farming: Solar, Transmission Lines, Minerals

Farmland offers optionality beyond crops, including solar projects, transmission-line access, water rights, carbon credits, minerals, hunting, and other recreational or alternative uses.

Data Centers?

LandFund has not actively pursued data centers, though its Mid-South holdings are near expanding data-center activity and could benefit indirectly from regional demand for power and water.

What's next for LandFund

Farris says LandFund will remain focused on its Mid-South niche, expanding its 40,000-plus-acre irrigated portfolio through an evergreen fund rather than broad geographic diversification.

Why Farmland Has Had Negative Correlation With Risk Assets

Farmland’s negative correlation with stocks and bonds, government support, stable rents, and resilience during prior market drawdowns make it a potential 5-to-10-percent portfolio allocation.

Super El Niño: What to Expect

Farris expects a super El Niño to bring hotter, drier conditions to Brazil, Argentina, Southeast Asia, and India, with the greatest risks concentrated in rice-producing regions.

Feeding ten billion people

Feeding a projected ten billion people will require more protein production from less land and water, making technology, food security policy, irrigation, and agricultural infrastructure increasingly important.

The 20-year outlook for all Four Crops

Over the next two decades, demand for all four crops should remain strong: rice may see the sharpest near-term upside, corn may gain from biofuels, soybeans remain vital for feed, and cotton retains strategic uses.

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

No Guarantees: Past performance does not predict future results; investing carries risk.

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