March 30, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Farmland investment manager FarmTogether began in 2017 with a straightforward mission – to democratize farmland investing. 

Historical data shows that over the past five decades, ROI on farmland investments have outperformed the CPI by 7.74 percent on average, while generating both attractive absolute and risk-adjusted returns and providing a hedge against inflation and economic downturns. It is this market, valued at $2.7 trillion, that FarmTogether is tapping into to open unparalleled access to institutional-quality farmland assets through a variety of products, having funded over $170 million in AUM through crowdfunding offerings, 1031 exchange, sole ownership bespoke offerings, and its Sustainable Farmland Fund launched in March 2022.

“Over the last several decades, farmland’s performance as an investment has been remarkable – outperforming returns from the stock market, bonds, and even real estate. Even more impressive, farmland has produced a positive return every year since 1991 and is one of the best stores of real value during inflationary periods,” Artem Milinchuk, CEO, FarmTogehter told GAI News in an interview in April 2022. 

“Yet, even today, farmland remains a largely untapped market. And that’s really why we set out to found FarmTogether in 2017.”

Following years of growth and success, FarmTogether has released a new study titled Farmland: A Historically Stable Asset During Uncertain Times that illustrates the historic resilience of farmland in the face of financial volatility and market turbulence over the last three decades.

Through the COVID-19 pandemic and subsequent market uncertainties, the performance of farmland is examined in the context of several major asset classes including equities, bonds, commercial real estate, and REITs. 

 “The last few years, even weeks, have been challenging to navigate from a portfolio management perspective,” said David Chan, chief client officer and head of business development, FarmTogether. “This study comes at a critical moment for those searching for uncorrelated, defensible alternatives for real capital preservation.”

FarmTogether collected data from a range of sources including USDA market reports and the National Council of Real Estate Investment Fiduciaries (NCREIF) Farmland Property Index, examining trends in cropland values, income, and other factors with the potential to impact performance of farmland investments.

The conclusion was made that while many global economic sectors continue to experience negative challenges due to the pandemic, farmland remained a stable, reliable asset throughout the period despite early headwinds due to supply chain disruptions and reduced demand for some products. Each year over the last three years, farmland investments saw net positive growth, outpacing the performance of each asset class analyzed in the study. 

Milinchuk touched upon the strength of the asset class last year, when he told GAI News, “Historically, farmland has been one of the most inflation- and recession-resistant asset classes. This performance is driven by the population’s need to eat – no matter the economic environment. In turn, the underlying value of farmland tends to remain stable, presenting a solid option for those looking to safeguard their portfolios against risk.”

“The increasing scarcity of farmland, a result of both real estate development and a changing climate, should only make the asset that much more valuable over time. And, because the value of farmland isn’t often impacted by events that might send markets tumbling, farmland has been historically uncorrelated with most other asset classes, making it a strong diversifier for almost any portfolio.”

This new study can be downloaded in its entirety here.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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