Why Invest in Agriculture?
- Apr 5, 2020
- By Admin
There is no better asset to own than one that increases in value over the long term and keeps pace with inflation. What if you could invest in something tangible that produces community benefits? According to one study, one of the last things people are willing to cut from their budgets is food. The population is only increasing, and with it the demand for goods is increasing as well. Investing in agriculture means supporting an industry and lifestyle, keeping farmers in the business of farming, and keeping your investments more secure than they would be in the stock market.
As technology has advanced, we have seen the agriculture industry take a backseat. It shouldn’t be seen this way. Families hand down their farms generation after generation, and farming is a learned skill that many people do not possess. Agriculture is what fuels our Friday night dinner dates, our affinity for home and office decor, and our Sunday night grocery trips.
Supporting farms means they do not have to have the threat of a foreclosure from the bank looming over their heads. Your investment provides capital for farmers to maximize their yields and productivity. You help fund farmers’ access to inputs or the equipment they need to make their yields as bountiful as possible. Agriculture is more sustainable than the stock market.
When you invest in agriculture, you are investing in a physical plot of land. This land’s value only appreciates, unlike stocks in businesses.
Investing in agriculture is typically a long term venture. Returns vary depending not only on commodity prices, but on how much and how fast the land appreciates. Depending on the farm’s location, current commodity prices and other factors, returns on investment range from 3-5% for commodity based land, or 10-15% for specialty crops. Because agriculture investments are long term, they can be set up to be kept in the investor’s family and passed down to future generations. Agricultural investments can appreciate indefinitely.
Keeping Farmers in the Business of Farming
Investing in agriculture and farmers keeps people fed and clothed. We all need to eat. Trends show that the amount of food, especially protein, people take in per day is steadily increasing. At the same time, some experts fear that at the rate of the population’s consumption, soil could become a scarce commodity.
Something else to consider is the eat clean and eat local movement. People are growing more and more selective in the food that they put in their bodies. Farm to table style restaurants and markets are extremely popular right now, and even more so if they’re local. Knowing that the burger you’re eating came from a farm five miles away, right in your community, is extremely attractive to the consumer.
In many ways, investing in agricultural can be a strong and fruitful venture. Farmland in itself is a useful, tangible thing and agriculture yields physical results that can be directly correlated to the success of the farm and where it’s heading in the future. By investing in a farm, you are investing in the success of a community and securing a piece of land that will appreciate year after year.
Source: Harvest Returns