We were engaged to provide valuation services to this large Western Agriculture Bank. The bank had issued long term debt to a specialty produce farm and distributor in Northern California. However the farm had suffered operational issues a few years back and had not recovered at the time of our initial engagement.
We worked with the bank to determine the fair market value of the equity of the farm to support their lending requirements. The work required careful consideration of crop yields and factors affecting these yields that were particular to the farming techniques employed. Other considerations were the ability of the firm to distribute to large retailers like Costco and Trader Joes and strong seasonality in product demand.