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If you want to hedge your bets against inflation, all you have to do is buy bitcoin, gold, or 100 acres of hayfields in Nebraska.
The amount of farmland bought by investment firms has jumped 231% from 2008 to the middle of last year, according to the National Council of Real Estate Investment Fiduciaries. Investors owned $16.6 billion worth of farmland at the end of 2023, up $9.2 billion from 2020.
- Aside from being relatively unaffected by inflation, farmland is a solid investment: The world will need to produce 60% more food by 2050, according to UN estimates.
- The value of farmland increased from $2,700 per acre in 2010 to $5,460 in 2023, according to the USDA.
As the average age of farmers goes up, experts worry it’ll be harder for the industry to attract young people to the field (literally), especially now that they’re competing with deep-pocketed investors.
Bipartisan concern over who owns the strawberry patch
US politicians are mad about investors buying up farmland, but they are even madder at the foreign investors doing it. Members of Congress and at least 36 state lawmakers have introduced bills over the last year that would limit or ban non-US citizens or people from certain countries (mostly Iran, Russia, China, and North Korea) from buying farmland.
- Chinese billionaire Chen Tianqiao is the second-biggest foreign owner of US land—though less than 1% of foreign-owned land in the US is owned by Chinese interests, per the USDA.
- Canadian investors take the cake, owning 31% of foreign-held US land, which comes out to just under 1% of total US agricultural land.
Looking ahead…industry experts estimate that investment firms still only control about 1% to 3% of the market. But the speed at which these groups are snapping up land—and driving up prices—is what has lawmakers nervous, and that’s why restrictions could be part of a farm bill that’s expected to pass at some point in the next year.—MM
FAQs
Hedge against inflation. As inflation climbs, many investments can plummet in value. Farmland, on the other hand, has seen its value increase during inflationary periods, making it an effective hedge against rising prices.
What do you believe are some disadvantages to these investors buying farmland? ›
The biggest drawback would be adapting to the significant shift in the environment because you'd have had to relocate nearer to your farms, which would most likely be in a remote setting.
Who is buying up farmland in the US? ›
Outside ownership of US cropland is drawing attention from Washington as concern rises about possible threats to food supply chains and other national security risks.
How do you evaluate farmland as an investment? ›
Contact Local Experts
- Tillable acres.
- Map of soil types and ratings.
- Soil fertility.
- Water and mineral rights.
- Easem*nts to adjoining property such as driveways, railroads or buried natural gas lines.
- Historical yield information.
- Tile and field drainage maps.
Do billionaires get farm subsidies?
| Billionaire or billionaire family | Acres owned |
|---|
| Mike Smith | 351,000 |
| Bass family | 285,000 |
| Fasken family | 284,493 |
| Bill Gates | 275,000 |
39 more rowsDec 14, 2023
Farmland is an Irreplaceable Resource
And when managed well, it supplies environmental services like flood and fire control and storing carbon in the soil. Fertile soil is a dynamic living resource. It forms slowly and its loss threatens the world's supply of arable land for generations.
Why does Bill Gates want to buy farmland? ›
He responded, “I own less than 1/4000 of the farmland in the US. I have invested in these farms to make them more productive and create more jobs. There isn't some grand scheme involved - in fact, all these decisions are made by a professional investment team.”
Is farmland a good investment in 2024? ›
At current USDA cost of production projections, corn and soybean prices are set to decline closer to their respective cost of production levels. Likely, we can expect farmland values to plateau in 2024 or at best, achieve a slower rate of growth, year-over-year, of under 5%.
Is now a good time to buy farmland? ›
Commodities have been rising since 2020 driven by strong demand and supply shortages arising from the economic reopening from Covid-19 and Russia's invasion of Ukraine. Higher commodity prices have led to higher returns for farmland investing in the last two years because harvest income and land prices have increased.
How much U.S. soil does China own? ›
According to a 2021 report by the Department of Agriculture, China owns 384,000 acres of American agricultural land; ownership which jumped by 30% from 2019 to 2020.
Jeff Bezos, your friendly founder of Amazon, recently purchased 400,000 acres of farmland in Texas. Other real estate billionaires have bought thousands of acres in Indiana, Illinois, Iowa and Florida according to Hansen Land Brokers, Inc.
Who owns the most land in America? ›
The largest private landowner in the United States is the Emmerson family, which owns and operates Sierra Pacific Industries, one of the largest lumber producers in the country.
Is farmland a risky investment? ›
The land parcel itself is a hard asset typically maintains its value in your investment portfolio. Its low-risk nature can help diversity your holdings and balance out some of your riskier stock market investments.
What is the average return on farmland investment? ›
In contrast, most farmland investors expect a more modest 2.5% rate of return annually. The goal of farmland investment is to hold onto it because they are not making any more of it. Looking back, the average return on farmland has been around 12.5%, according to AcreTrader.
Can farmland pay for itself? ›
By using your land wisely, you can make it pay for itself. Stepping into agriculture brings financial rewards with sustainable farming practices, reducing costs over time. Leasing unused portions to local businesses also provides steady income streams.
How much farmland did Jeff Bezos buy? ›
Ted Turner, the media mogul, also owns 2 million acres of farmland, while Amazon founder Jeff Bezos owns over 420,000 acres.
Why are athletes buying farmland? ›
Why did Joe Burrow and other athletes buy farming land. The group bought the land to then lease it to farmers who work it and gives the athletes a single-digit percentage annual return to their investment, a move that was presented by Patricof Co.
Why is farmland getting so expensive? ›
A lot of it's attributed to COVID spending and so much influx of cash into the market.” He also said the war in Ukraine, one of the world's largest producers of wheat, has pushed up commodity prices significantly, causing many farms to see appreciation over the last two years.
