Agricultural earnings in the U.S. are set to outperform equities and bonds by as much as 8% over the next ten years according to insights from Morgan Creek Capital Management delivered at this year’s Global AgInvesting Conference in New York from April 28th – May 1st . Farmland in particular is expected to outperform equities and bonds at a return of 11% as opposed to 3% and 5% respectively. Margaux Beauchamp, Corporate Finance Executive Director for BDO believes that these facts hold important relevance for Australia’s agricultural sector. If Australian agricultural investments can outperform Australian equities and bonds in this way the industry will be able to attract the A$1 trillion needed for production growth and farm turnover to 2050. If Australia can double the real value of agricultural export by 2050 the sector can see additional revenues of A$710 billion. Interest in agricultural investment is growing, however the sector still only represents approximately 1% of assets in many portfolios despite its use as a hedge against inflation, better earnings, diversification abilities, and relatively low volatility.
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