URBANA — The need for more information on farmland economics drove financial services firm TIAA-CREF to help fund a new research center at the University of Illinois, a company spokeswoman said.
The TIAA-CREF Center for Farmland Research was formally launched Wednesday at the UI, thanks to a pledge that reportedly totaled $5 million.
The center will conduct research and host academic symposiums focused on farmland prices and the financial aspects of farm management.
Heather Davis, head of global private markets for New York-based TIAA-CREF, said the company began investing in agricultural assets in 2007. She said the firm recognized that growing populations in emerging markets would have a greater desire to consume animal protein.
Grain would be needed to feed those animals, and TIAA-CREF wanted good data on land in grain-producing areas.
In some cases, the data didn't exist. But some of the best information in the world came from research at the UI's College of Agricultural, Consumer and Environmental Sciences, Davis said.
Since that time, TIAA-CREF has built a huge portfolio of farmland, with $4 billion in agricultural assets in the United States, Australia, South America and Eastern Europe, Davis said.
But to continue to attract investors, more research is needed, she said.
"You can't attract capital without information," Davis said. Data is needed to convince institutional investors and "help them make the leap as we did," she said.
Among the questions TIAA-CREF would like to see answered, Davis said, are:
— What is the impact of interest rates on farmland investment?
— How do fluctuating commodity prices in the short term affect investments in the long term?
— Are farmland investments practical for those who are not long-term investors?
— How can capital resources be used to help solve the growing need for food in the world?
UI Chancellor Phyllis Wise compared the new partnership with TIAA-CREF on farmland research with the university's existing partnerships with BP on energy and biofuels and with Abbott Laboratories on nutrition and memory.
Robert Hauser, dean of the agricultural college, said the center will build on the college's Farmdoc online research program and give additional capacity to already-strong programs in research, academics and outreach.
In 2010, TIAA-CREF bought a controlling interest in Champaign-based farm management company Westchester as part of the foray into agricultural assets.