Investing In Farmland And Agriculture

This is a guest post by Liquid, the author of Freedom 35 Blog. He is an avid investor of alternative asset classes such as farmland.

Food is an important part of our culture. Since agriculture is so ingrained in our lives it’s only natural that it should also be a part of our investment strategy.

Farmland and Agriculture

Why Invest in Farmland?

Inflation hedging is the main reason why many investors are looking at agriculture. It’s another way to fight the higher cost of living. And unlike gold, which is also a hedge against inflation, farms have the added benefit to actually be productive and generate income.

Farmland also tends to be more stable (less volatile) than the stock market in general, and unlike houses or apartments they aren’t making any more farms.

In fact the supply of farmland has declined over time because of changes in the global climate as well as urbanization, since there is less room to farm when cities expand.

Farmland values have soared across the U.S. over time. For example, the average price of farms in Iowa ten years ago was $3,000 per acre. Today, the average price there has grown to $8,000 per acre…That’s a compound annual growth rate of over 10% a year.

Many famous investors such as multi-billionaire George Soros are big fans of farmland and agriculture. American businessman, investor and author, Jim Rogers, is also very bullish on farmland. He believes agriculture will be the king of the commodity hill throughout the next couple of decades.

As developing countries continue to prosper and expand their appetite for a middle class diet, providing them with enough food will become an important world wide issue.

How To Invest in Farmland & Agriculture

There are many ways for investors to get a piece of the agriculture sector. The most convenient way is to invest indirectly via the stock market. There are a number of high quality stocks and ETFs that track the farming landscape.

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Disclosure: None.

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