Over the past decade, more and more farmland in Michigan has been bought up by foreign companies.
As the latest federal data shows, Michigan saw a big increase in foreign ownership two years ago – from 5.6% to 8.6% of all agricultural land. This puts Michigan among the states with the highest levels of foreign land ownership, with the forest lands of the Upper Peninsula making up the largest share.
The amount of foreign-owned farmland in Michigan remained stable for over a decade, with more than 460,000 acres purchased in 2022, federal data show. But even as the question of who owns farmland heightened national security concerns last year, the share of foreign investment remains low.
“I think the biggest misperception is how much they actually own. There is a lot less foreign ownership than people think,” says Bill Knudson, a Michigan State University economist who has written about the issue.
Foreign investors – that is, anyone who is not an American citizen or legal immigrant, and any U.S. company with “significant foreign interest” – are required to report their land purchases annually to the U.S. Department of Agriculture.
In 2022, almost half of the total increase was attributable to three federal states.
“These increases largely reflect large purchases of forestland in Alabama and Michigan, while the increases in Colorado are primarily due to cropland and pastureland,” the U.S. Department of Agriculture said in its latest report.
Uttar Pradesh’s forests make up the majority of foreign-owned land
In Michigan, about 92 percent of foreign-owned land is in the Upper Peninsula, but this is still only a fraction, 8 percent, of the state’s total agricultural land.
Keweenaw County tops the list with 370,345 acres – all timberland – and the biggest jumps from 2021 to 2022 were in the Western Upper Peninsula. In one year, out-of-state buyers acquired 81,899 acres of timberland in Gogebic County, 108,305 acres of timberland in Keweenaw County and 94,283 acres of timberland in Ontonagon County.
“The forestlands in the Upper Peninsula are generally Canadian-owned, and we have generally never had a problem with Americans investing in Canada or Canadians investing in the United States,” Knudson said.
In Alger, Luce and Marquette counties, Canadian companies are the largest foreign owners.
But in Keweenaw County, where the proportion of international ownership is highest, Canada has no share; Dutch companies own 120,000 acres and “everyone else” owns more than 250,000 acres.
“You don’t really know who owns what in the United States or abroad – it can be pretty difficult to keep track of it,” Knudson said.
Current federal data – which are three years old and do not take into account recent acquisitions – show that timber investment firms own most of the foreign land in Keweenaw. They include GMO Threshold Timber Michigan, a company with Dutch ties, and Lake Superior Land Co., which has ties to the U.S. Virgin Islands.
However, it can be difficult to track the latest sales.
In Gogebic County, property and corporate records shed some light on the 131,177 acres purchased by a foreign entity between 2021 and 2022. Although the documents do not directly name a foreign buyer, MLive followed the paper trail to find out who these groups were associated with.
Here are some of the breadcrumbs of a sale: The Keweenaw Land Association mentions in a 2021 annual report that it sold more than 178,000 acres of forest assets this year.
A GIS map of Gogebic County shows that the Keweenaw Land Association sold parcels of an unknown size to Sage Timber Michigan LLC in 2021. The LLC is affiliated with the Rohatyn Group, a timber investment firm that has purchased timberland in eight countries. The group’s founder, Nick Rohatyn, is listed in the LLC’s filings.
Although the Rohatyn Group is based in the United States, federal records indicate that its previous land purchases through Sage Timber Wisconsin LLC are linked to Singapore. Sage Timber Wisconsin LLC, which also names Nick Rohatyn, purchased 160 acres of timberland in Iron County, Wisconsin in 2021.
Chinese ownership remains low
The U.S. Department of Agriculture report goes into detail about Chinese farmland ownership, which is causing increasing concern among some politicians.
Two Republican members of the House of Representatives, Reps. Ashley Hinson of Iowa and Dan Newhouse of Wisconsin, introduced a bill last year that would not allow foreign nationals with ties to the Chinese Communist Party to purchase agricultural land.
More than two-thirds of states have implemented or are considering laws to restrict foreign land ownership, Politico reported in April. That includes South Dakota, where Republican Gov. Kristi Noem signed a law in the spring banning “six evil foreign governments” — including China — from owning agricultural land.
And Republican Eric Hovde, who is running for a U.S. Senate seat in Wisconsin, claimed at a campaign rally in May that China was “buying up large parts of our agricultural land.”
But recently published research refutes these claims.
Researchers at Cornell University found that Chinese companies own a “relatively modest” 352,139 acres, or less than 1% of American farmland. By comparison, Canadian investments account for 32% of all foreign farmland, or 14 million acres; the Netherlands owns 12%, Italy 6%, and the United Kingdom 6%.
“There have been no notifications directly from the Chinese government,” the USDA said.
Of the Chinese holdings, two companies – Brazos Highland Properties and Murphy Brown LLC – own the largest agricultural acreage in eight states, including Texas, North Carolina and Utah.
According to a map from the U.S. Department of Agriculture, Chinese investors do not own any land in Michigan.
“A lot of people are interested in what China is up to, but no matter what you hear, they don’t seem to be particularly engaged in it either in Michigan or in the United States,” Knudson said.
Earlier this year, the U.S. Government Accountability Office released a report on how to better assess national security risks posed by foreign farmland ownership. One recommendation is that the USDA should release more current data, since the last annual report covered 2022 and detailed ownership information dates from 2021.
Renewable energies play a greater role
The researchers also found that renewable energy production has led to foreign land purchases in recent years. Of the 44 million acres reported to the USDA, about 25 percent of the companies had the word “wind” in their name.
In Shiawassee County, wind farm companies are the largest foreign landowners. JW Great Lakes Wind LLC, which has ties to Germany, owns 5,930 acres and Shiawassee Wind Project, LLC, which has ties to Canada and Italy, owns 21,500 acres.
The Cornell University researchers wrote that most of the land leased by foreign companies is used for wind and solar farms, while most of the “fully owned” land is used for timber and lumber production.
In Michigan, 1.6 million acres of foreign-owned forest land are forest land, while 57,000 acres are “non-agricultural.”
Why do foreign companies buy US land?
For Knudson, the reason foreign companies buy American farmland is simple: It’s a good investment.
Property values for farmland have risen steadily over the years, most recently increasing 7.4% from 2022 to 2023, after increasing 12% the year before. According to the USDA, values averaged $4,080 per acre last year, compared to $2,730 in 2013.
“It offers a pretty good return,” Knudson said. “You know, over the last four or five years, it’s gone up about 10% a year.”
Foreign investors also tend to pay a higher price.
An analysis of farmland purchases found that foreign buyers pay 13.7 percent more for farmland in the Midwest than domestic investors. And research found that local farmers typically purchase land at lower prices than foreign buyers.
“If you’re a landowner and you’re thinking about selling your land, you want to have as many buyers as possible,” Knudson said.
Editor’s note: This story has been updated to remove an inaccurate property sale price.
