Agriculture and Farmland
Money growing on trees. It’s fun to imagine … but what if you really could
grow money with the power of plants?
In our view, agriculture land and agricultural commodity investments are one of the hottest alternative real estate investments out there right now … for good reason.
Unlike other markets, agriculture is global. Think about it … besides basic housing, what is another commodity that everyone needs? Food!
Every time you step into a grocery store or a farmer’s and make a purchase, you send money to agriculture land investors and farm owners.
And agricultural profits aren’t just limited to edible commodities. Think your hardwood floors … A valuable source of profits for farmers of teak and other prized woods.
So why not get in on the profits yourself?
Demand for agricultural products is consistent … and growing steadily as global populations increase. The world population is expected to grow from 7.4 billion to 9.7 billion by 2050. More people = more food = more money in the pockets of food producers.
And with modern technology, agricultural products can be distributed in markets across the world. World-wide demand provides stability.
The Food and Agriculture Organization (FAO) forecasts that a 60% expansion in food production is needed by 2050. This increase in demand is occurring when 80% of arable land is already in use and current arable land degradation is occurring at a pace 100x greater than the rate of formation and recovery.
In the United States, annual returns on farmland have averaged over 11% for the past 25 years. But agricultural investment opportunities are not limited to the United States … they are available across the world, providing you a way to extensively diversify your portfolio.
Agricultural investments can act as a buffer to market volatility. In 2008, farmland was one of the few assets that ended the year up despite the sobering market crash. One of the best assets to own during times of crisis, and especially during a period of growing inflation, is farmland.
When investigating agricultural opportunities, consider …
- Global markets > local markets. When investing in a real asset like agriculture, global markets are more important than local markets. Investigate global demand for various agricultural products before checking out local specifics.
- Aim for sustainability. Agriculture is often considered a steady investment … but only when crops can be sustained for generations without harming the land they grow on. You want investments that will be consistent for the long term.
- Consider the land. Based on your chosen crop, consider the natural climate, soil, and weather conditions that will be most conducive to profitability.
- Take a look at local factors. Although agriculture meets a global demand, investors need to consider local factors such as labor supply, land ownership rights, and tax climate.
Sound like a lot to figure out? As with any investment, it’s essential investors build a team of experts to manage and grow their investment.
Finding the right farmers and on-site management team is a crucial piece of a successful agricultural investing … and why syndicated investments can be a great option. Economies of scale attract quality farming teams and create greater returns. Passive investors buy a parcel of land without having to worry about hands-on, day-to-day operations.
Agricultural investments can be a great addition to your investment portfolio. Just be sure to plan how your chosen commodity fits into your portfolio. Some crops, like hardwood trees, are a great legacy investment, while other crops can provide more immediate cash flow.
Investing in agriculture can mean wildly different things … from coffee and cacao beans, to teak trees, to coconuts.
Below is a list of helpful resources. Do your homework … and then considering giving this “green” investment a shot!
- Agriculture Investing – An Opportunity to Diversify Globally
- Farming for Profits with Agricultural Investing
- Farming for Profits Part 1 – Investing in Essential Resources
- Farming for Profits Part 2 – Cash Flow vs. Legacy Investing
- Sweet Returns with Low-Impact Tenants
Reports & Articles
- Boots-on-the-Ground Market Insights: Agriculture
- Citrus Fruits in Paraguay – Investments that Grow Naturally
- Squeezing Income from Oranges in Paraguay
- Planting Your Flag in Panama
- Precious Teakwood: What You Need to Know
Market Field Trips & Property Tours
Clues in The News
- Connected Agriculture Market 2019 – Analysis, Trends, and Forecasts to 2025 – July 31, 2019
- Bill Gates spends $171 million to buy huge swath of Washington farmland – October 1, 2018
- Farmland Values Hold Strong – September 25, 2018
- Agriculture boom now in the making, says Jim Rogers – January 15, 2018
- Around The World With a Timberland Outlook – December 7, 2017
- Top 15 Caffeine Addicted Countries with the Highest Coffee Consumption in the World – November 16, 2017
- My Post-Hurricane Loss, Your Profit: Buy WOOD – September 17, 2017
- Uganda seeks to earn more from coffee happiness – August 20, 2017
- Timber provides certainty amid tax reform questions – August 9, 2017
- Backing agriculture and the rural economy – August 9, 2017
- As demand rises, local coffee could emerge as key national export – August 1, 2017
- Who really owns American farmland? – July 31, 2017
- Record Coffee Earns $601 Per Pound at Best of Panama Auction – July 26, 2017
- How to Invest in Farmland – May 26, 2017
- S. farmland becoming a hot commodity as investors buy up acreage – May 4, 2017
- Forests Are a Treasure. But Are They Good Investments? – January 13,2017
- Why Farmland Has Become a Popular Alternative Investment – October 3, 2016
- Investors pour money into agriculture land, see good returns – May 4, 2016
- Investing In Farmland: REITs, Stocks And Partnerships – April 3, 2016
- NAR Field Guide to Agricultural/Farm Land – April 2016
- Why Invest in Hardwood Forests? – March 15, 2016
- Jim Rogers: Choose Farming for Your Family and Finances – December 14, 2014
- Timber! Why the rich are buying trees – November 24, 2014
- Dirt Cheap? Investors Are Plowing Into Farmland, Here’s Why – September 23, 2014
- Farm Land Rush – September 2011
- For Some Investors, Money Grows On Trees – May 27, 2007