Foreign Investment in Louisiana's Timber Industry Propels Influx of Capital in Agricultural
According to a recent report from the U.S. Department of Agriculture and industry leaders, foreign investment in Louisiana's rich timber resources has helped propel foreign investment in Louisiana's agricultural land.
At the end of 2021, nearly 6% of Louisiana's agricultural land was held by foreign entities, tied for the sixth-highest proportion among U.S. states and territories. The USDA report, which was published in December, revealed that foreign entities owned about 1.39 million acres of Louisiana's roughly 23.9 million acres of agriculture. This total was a slight uptick from 2020 when foreign investors owned 1.38 million acres of the state's agricultural land.
Foreign investment in the state's agricultural land is predominantly from timber companies, mainly from Canada. According to the report, Canadian firms owned about 411,000 acres at the end of 2021, more than a quarter of all foreign-owned agricultural land in Louisiana.
Canadian firms like Teal Jones, Telko, and Interfor are investing in Louisiana's timber industry. Buck Vandersteen, the executive director of the Louisiana Forestry Association, said that Canada's forests do not grow as quickly as the southern forests. Even with high-interest rates, those firms "are optimistic about the future of homebuilding," a key market for timber. Additionally, other industries, including those that utilize wood pellets, are also creating demand in the timber industry, according to Vandersteen.
In Louisiana, the two parishes with the most foreign-owned agricultural land were Vernon, with 185,767 acres owned, and La Salle, with 165,103 acres. All of the La Salle acres and slightly less than half of the Vernon acres are owned by Canadian investors, the report says.
The report is produced annually by the USDA and released in December. Federal law required foreign entities to report their U.S. agricultural land holdings. The report reveals that foreign investment in land in the United States has been on the increase since 2015, with the curve growing steeper in 2018. Nationally, much of the recent uptick has come from foreign firms holding long-term leases for cropland on which wind farms are placed.
After Canada, Dutch investors own about 307,000 acres in Louisiana, according to the report. Dutch firms own 12% of all foreign-owned agricultural land in Louisiana, and Italian firms own 7%. Those from German and the UK own about 6% apiece.
The picture is similar nationally, with Canadian investors owning 31% of all foreign-owned agricultural land in the United States. Maine has the highest proportion of agricultural land owned by foreign investors, where 20.1% is owned by non-American interests. The next highest states are Washington (7.2%), Alabama (6.3%), Florida (6.3%), and Hawaii (9.2%). Michigan also had 5.8% percent owned by foreign investors, according to the report. In terms of total acreage, Texas was first, with more than 5.2 million acres, but that accounted for only 3.4% of its agricultural land, according to the report.
The increasing trend of foreign investment in U.S. agriculture has sparked concerns among lawmakers, who worry that foreign investors may have different motivations for land ownership than U.S. residents, such as environmental or national security risks. Some experts have also pointed out that foreign investment may drive up the price of land, making it harder for domestic farmers to compete.
However, proponents of foreign investment argue that it can bring capital and new technology to U.S. agriculture, which can help boost production and innovation.