Shelter in a time of uncertainty

A group of farmers are discussing in the field, using a tablet. Two men and one woman. Team work in agribusiness
StockMediaSeller / Shutterstock

Unlike many other types of investments, farmland is intrinsically valuable — come what may, people still need to eat. And with the global population poised to hit 10 billion by 2050, there will be no shortage of mouths to feed.

The rate of return on farmland over the last 47 years is 10.27% — better than average returns on real estate or stocks, according to data from the investing platform FarmTogether.

Over the last 20 years the numbers have been even stronger, with farmland investments yielding a return of 11.98% compared to 8.68% for real estate and 8.78% for the Russell 3000 Index, a capitalization-weighted index that aims to be a benchmark for the U.S stock market.

If all of that sounds appealing to you, make sure to get started with your research. The United States has less and less of this valuable resource by the day — the American Farmland Trust says 11 million acres has been lost to development over the past 20 years — and much of the remaining supply is about to go on sale.

Bill Gates made a splash in 2017 when he bought $520 million worth of U.S. farmland, and he’s continued to invest since. What’s in it for Gates?

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Farmland is changing hands

Senior man farmer shaking hands with young pretty woman with notebook in corn field. Insurance in agribusiness concept
Budimir Jevtic / Shutterstock

The U.S. population is aging, and working the land has always been a demanding job. While family farms make up 96% of all farms in the country, federal data suggests the next generation isn’t interested in taking up the task themselves. Farmers over age 65 own 40% of the land and outnumber farmers below 35 by a factor of six to one.

The result: A profitable asset is hitting the market that has, until now, been difficult to buy into. Farmland has traditionally been privately held, but as more farmers retire and sell or rent out their land, investors have a rare window.

Over the next 20 years, approximately 370 million acres of U.S. farmland will change hands, according to the American Farmland Trust.

So, how does someone without any experience in agriculture take advantage of this opportunity? Thankfully, you don’t need to grab a pitchfork — Bill Gates currently owns more farmland than anyone else in America — and you don’t even need to buy an entire farm.

Here’s how to get started

Tractor spraying pesticides on soybean field  with sprayer at spring
Fotokostic / Shutterstock

FarmTogether is an all-in-one investment platform that lets qualified investors buy stakes in U.S. farmland. The company pursues attractive properties and then partners with experienced local farmland operators, who manage the land.

Depending on the type of stake you want, you can get a cut from both the leasing fees and crop sales, providing you with a cash income. Then, years down the line after the farm rises in value, you can benefit from appreciation of the land and profits from its sale.

With a minimum initial investment of $15,000, FarmTogether’s offerings are primarily aimed at experienced investors looking to diversify their portfolios with alternative assets. The platform is also restricted to accredited investors with the SEC.

Start by opening a FarmTogether account free of charge. You can sign up without any obligation to invest and you’ll get a sampling of the data and tools that active investors can access.

It’s rare to find an asset that beats other investing options in both returns and stability. With a potentially once-in-a-generation opportunity opening up, take the time to investigate whether farmland should be part of your portfolio.

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About the Author

Justin Anderson

Justin Anderson

Former Reporter

Justin Anderson was formerly a reporter at MoneyWise. He has a degree in Journalism from Ryerson University and his career has seen him cover everything from business and finance to the entertainment industry to politics, with plenty in between.

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The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.