An Interview with Murray Wise
Talking shop with the Nationally Renowned Farm Management Pioneer
In the world of farm management and farmland investment, the name Murray Wise is synonymous with high-quality agricultural farmland across the Midwest. For those that are unfamiliar, Murray founded the Westchester Group back in the mid-eighties, managing large land portfolios for investment groups and individual investors. At its peak, and prior to selling the company to TIAA-CREF in 2010, the Westchester group had over $1 Billion of total capital under management.
A graduate of Iowa State and armed with an MBA from the University of Illinois, Murray Wise has been recognized for his innovation in farmland sales, auctions and management from a variety of Ag industry professionals. Today he continues to run a thriving business, Murray Wise & Associates, providing real estate financial advisory and investment services.
I caught up with Murray Wise shortly after a short visit to his Champaign, Illinois office. As an industry veteran, his enthusiasm for agriculture and the viability of farmland as one of the soundest investments available was very apparent. While he remained cautious from an operations standpoint, he continually praised farmland real estate as an essential part of the success investor’s portfolio.
What is your view and outlook on the Ag industry today?
“Right now I would exercise a degree of caution by keeping a very close eye on cash flow,” said Murray without hesitation. Worldwide grain commodities are in a time of surplus and commodity price volatility could continue to be common going forward. “I lived through the mid-eighties and I certainly don’t want to see the loss of farmers we endured then,” Wise added.
What do you feel is the biggest change or shift in farming operations?
“Without a doubt, the #1 change is technology. From precision agriculture efficiency to drones, I am excited to see how the farm operation of tomorrow evolves,” said Wise. “Another interesting shift is the number of young people coming back to the farm with a variety of college degrees. From CPAs to business school graduates, there are many young farmers who are adding a significant set of skills to the family farm toolkit. On a go-forward basis, there is a degree of complexity to farming that requires the ability to adapt. Those that adapt will continue to do very well for themselves,” added Wise.
How do you see farm data influencing the future of Agriculture?
“I am particularly interested in farm data and am keeping an eye on the changes occurring here,” said Mr. Wise with strong concern. “There is a bit of a civil war going on in the farm data space. You have John Deere, Monsanto and a 1,000 other companies who all want to do something for the farmer so they can harvest, store and analyze this data – not because they are being nice, but because there is a dollar value there.” While we can’t predict how farm data might fully affect the Ag industry, it’s an area that we need to continually pay careful attention to.
In terms of farm land values, what are you seeing in the land market?
In Murray’s opinion, “We are in a really unique land market with A and A+ quality land values remaining steady and in some cases higher per acre. On the other hand, B and C quality agricultural farmland has slipped with B land down about 10% and C quality land is down closer to 15-20% in value.” By historical standards, these land values are nearly double of what they were a decade ago. For those considering retirement, today’s market still represents a great time to sell.
When making on-farm improvements, where would you invest your dollars?
“I am a fanatic of tile drainage. In the last five years, I would venture to guess that per acre owned, I have installed more acres of pattern tile than any other person in the Midwest,” said Wise with quite a bit of seriousness. He went on to say that his own farms have good outlets and pattern tiling from ‘fence to fence’ on 50 or 60 foot centers has been one of the best investments in productivity he has made. Murray went on to say that, “Tiling is an asset that will pay for itself over and over and if you don’t have it, your loss in income (from yield you could be getting with tile) will be greater than the cost of installation.”
What’s your # 1 challenge in the farmland real estate business?
“There’s very little land for sale. We have less land for sale today than when I first started in this business 39 years ago. There are very few sellers of land and many buyers in a strong cash position.” Murray went on to say this to investors of farmland, “We are in a time period where the alternative investments to farmland may not make sense. If you are in a well-capitalized position, buying another tract of agricultural land could be a very sound move.”
We covered a lot of ground in our conversation, from the hard work it takes to be successful in Agribusiness, to the common traits of successful people – being smart, reputable, and being yourself.
One pattern remained clear when speaking with Murray Wise, farmland investment in today’s real estate market leaves no room for carelessness. Proper due diligence on location, drainage, soil types and rainfall are all key drivers in the successful purchase and sale.
About the Author
The Back Forty is regular column written by Published Author & Purdue Graduate Johnny Klemme. His reporting, interviews with Ag Experts and more can be found at www.PrairieFarmland.com/blog