Why invest in farmland?

The primary reason more investors are turning to farmland as an investment opportunity is that it has a long history of producing solid returns. Those returns come in two forms:

  • Increases in farmland values.
  • Crop yields or cash rental payments.

Outperformed most other asset classes in the last 30 years

Low Volatility

Farmland returns have historically had less volatility than most other asset classes, including the 10-year U.S. Treasury Bond, S&P 500, gold, and Dow Jones REIT Index.

Low Correlation

Farmland returns typically don’t move in the same direction as the stock market. In many years, farmland has produced a positive return in a year that the S&P 500 has lost value.

Inflationary Hedge

Farmland is a real asset that produces commodities like corn and grain. As such, it benefits from inflation since that would boost not only acreage values but also crop income. Because of that, some call farmland a gold-like investment with a yield.