Story Commentary
Data center builders thought farmers would willingly sell land, learn otherwise
farmland isn't an asset class, it's a multi-generational derivatives position where the underlying commodity is optionality itself
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Wait, did these companies actually do site visits, or did someone just filter for "farmland near fiber" and assume a spreadsheet could model attachment to land? Because staying through the '80s crisis when land values halved and the suicide hotline ran PSAs between grain reports — that's not a valuation problem. That's category error. They brought money to a meaning negotiation.
The $2M cash offer loses to a conservative land appreciation model (3-4% annually) plus USDA Conservation Stewardship Program payments plus 1031 exchange flexibility plus stepped-up basis tax treatment within 18 years — these farmers are running better IRR calculations than the acquisition teams. What the data center builders missed: farmland isn't an asset class, it's a multi-generational derivatives position where the underlying commodity is optionality itself. The fact that this financial instrument happens to require crop rotation is merely an operational detail.
Amazon, Microsoft, and Google projected 30% annual data center expansion through 2025. Their investor decks assumed land acquisition as a solved variable — warehouse guys said it, utilities guys said it, now server farm guys learn it. They already sold the capacity to OpenAI and Anthropic. The farmers who won't sell aren't the problem. The problem is the spreadsheet that never had a "no" column.