In the following article land agent Ron Beach discusses the various factors contributing to farmland being a positive alternative investment including but not limited to:
Diversification – Farmland diversifies a portfolio through hedging against inflation, high total returns, and low volatility while holding a counter-cyclical correlation to more traditional investments.
World population and diets – Every day there are 205,000 additional people on earth to feed, and because of a growing global middle class, especially in China and India, high protein demand multiplies the demand for grain-producing land.
Ownership demographics – In the next 20 years almost 56% of Iowa’s farmland will be changing generational ownership as 30% of Iowa’s farmland is currently owned by people 75 years and older and an additional 26% is owned by people 65-74 years.
Capital source – Farmers are looking to sell farms that they can lease back in order to gain capital through a more cautious method for expanding operations.
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