Farmland, A Viable Asset Class

Farmland is uncorrelated from other asset classes, has acceptable income levels, and low volatility, making it a reliable inflation hedge.

Farmland is regarded as a safe haven investment and has always held its value throughout periods of economic upheaval. 

Farmland financial returns are inextricably linked to food prices, which typically rise with inflation and have been sustained by steady supply-demand dynamics. 

Due to impending productivity improvements from the deployment of new technology launched in the agriculture sector and the accompanying influence on farmland returns, now may be a tempting time to invest 5-7% to farmland.

Inflation Hedge

 

Safe Haven

Competitive Yields

Low Volatility

innovation

Aside from technologies used on farms that offer data on management techniques, there are a number of advancements happening all along the agricultural value chain. Without an intermediary, marketplaces that link farmers directly to suppliers or buyers may also help farmers save money or earn more for their produce. Additionally, advances in seed research and development could lead to higher yields and lower costs. In particular, CRISPR gene editing technology offers a wide range of potential uses, including halting the spread of disease in crops. 

The creation of conventional crop varieties can be sped up in terms of time and speed to market thanks to this technology.

Both elements will probably result in greater accessibility to rival seed varieties and lower prices when compared to existing seed trait offerings.

WHY FARMLAND NOW 

Given the lack of information and uncertainty around the speed of economic activity, financial markets continue to be volatile.

By causing significant supply chain disruptions and raising inflation, this uncertainty has been made worse. Investors have retreated to safe haven assets like gold, certain stable currencies, and U.S. bonds.

Farmland can give a typical portfolio some appealing qualities. 

Farmland can offer a tempting substitute for conventional safe haven asset types. Farmland has a reputation for maintaining its special value and revenue levels despite uncertainty and economic downturns.

For information on investing in farmland, go to acretrader

Disclaimer:

These illustrations are not a solicitation to buy or sell any ETF. 

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