Want To Invest In Farmland? Here's How

News & Current Events Public News & Current Events
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Farmland is a “holy grail” asset class for many investors.

It’s tangible, produces income, and has inherent underlying value – making it a great inflation hedge.

It’s supply constrained. Mother Nature isn’t making any more of it --and in total, farm acreage around the world is being lost to development, drought, etc.

Historically it’s an asset class that produces double-digit annual returns while remaining largely uncorrelated with the stock market, making it a valuable component for portfolio diversification.

And even better, it offers the chance to do well by doing good. There are increasing opportunities to convert poorly-managed conventional farmland to organic status through sustainable practices AND command much higher profits in the process. Smart farmers are now able to create superior business while healing the soil at the same time.

So, how can you get access to this attractive asset class?

Farmland investor Craig Wichner, Managing Director of Farmland LP, explains how in this week’s Market Update. He also details out the growing number of ways regular investors like you can purchase farmland and benefit from its many attributes without having to actually become a farmer yourself.

Which is why Craig agrees that now, more than ever, is the time to partner with a financial advisor who understands the nature of the market risks in play as well as the opportunities that farmland offers in a diversified portfolio to defend against them, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate:

Anyone interested in scheduling a free consultation and portfolio review with Mike Preston and John Llodra and their team at New Harbor Financial can do so by clicking here. And if you're one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical resilience preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

SCHEDULE YOUR FREE CONSULTATION

Prefer to listen offline?:

https://peakprosperity.com/want-to-invest-in-farmland-heres-how/

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I see tremendous potential in a model where 20-30 families purchase a farm that is run and managed by a regenerative / Joel Salatin type farmer. Residences could be built over time in a certain area, owners could receive or sell their share of meat/veggies, community and resilience would be cultivated and topsoil increased. What if any organizations do you all know of that are resources for this kind of collaboration? I have found Agri-Hoods and an upscale example in Georgia names Serenbe. Another is Building-Communities-with-Farms: Has this idea caught traction with Peak Prosperity and I missed it? Appreciate knowing what the collective knows - thanks!

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we have enough land and infrastructure. We need a person who knows how to save grain, mill grain and turn it into … We also need a person who can tan hides and fashion leather into harness and clothing.
We need a worldly Amish family. Without the religious attachments. Yes, we press cane, make syrup and ferment it.(distillation is an off thread topic.)
husband,father,farmer,optometrist

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I think sustainable agriculture sounds like a wonderful investment. But one must be an accredited investor to do so. I am not an accredited investor so my investment in sustainable ag will continue to be in the form of shoveling compost, expanding my garden, and picking weeds. ?

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We need a worldly Amish family. Without the religious attachments.
Really? So let's live in a world without any moral bearings? WTF You know better than that. husband,father,farmer,Christian
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my typing didn’t reflect my thoughts. I meant to imply, it would be difficult for plain people with their many rules and piety to mix, there is a reason they live parallel but seperate from society.
I stand corrected sir Gal 6:1

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Farmland has been my #1 investment over the past 14 years. Ive never regretted it. Of course, Ive owned the land and did the work myself, not sure how passive investment in farming would work. Part of the compensation has been the act of physically being on the land and enjoying the lifestyle.
 
I would also look into sustainable timber harvest. There’ve been times Ive made more from my timber lot than the farm. Timber has many advantages over farmland…it grows without inputs, or labor. Timber land is not “time sensitive” ie, lets suppose you had a pasture and some hay;
 
If the pasture isnt grazed or mowed it goes to seed, gets weedy and loses value. Hay is even more sensitive, it needs to be cut, fertilized, etc. If you let your fields go they get harder and harder to bring back. Soon small trees will start growing, and what you’ve got is just an overgrown lot that somebody has to be willing to work hard to bring back to production. So farm land is dependent on a farmer to maintain its value. Suppose the market for whatever you are producing drops out [ and it will every other year or so ], well you are still on the hook for the cost of working your land. You cant just walk away and say ‘I’ll wait till prices improve’. The hay has to be cut, the seed has to be planted, the pastures need to be grazed/fertilized, livestock has to fed etc,etc. Thats time, labor, fuel, feed, wear/tear on equipment, etc$, etc$,etc$…for a crop that is being produced at a loss.
 
Timber land, on the other hand, can be passively owned for decades [ it will likely only increase in value over time ]. If you lose your logger or have a falling out with the logging company, theres no immediate concern. If prices drop you can sit on it.
 
Some people have a misguided objection to logging. They think logging represents “destroying the forest”, the truth is quite the opposite. When proper, sustainable logging methods are employed we promote a healthier forest and a regenerative source of good quality timber.
 
My humble opinion, if you are going to be a passive investor, invest in something that accommodates passive management. Farming is a hyper-active pursuit. It almost all depends on the man at the wheel.

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There is a regenerative farmland REIT called Iroquois Valley that accepts those of us who don’t qualify as accredited investors. You do have to swear that you are investing less than a certain percentage of your assets or income, but it is not limited to the rich who can qualify as accredited. The Rodale Institute just invested in it, too. I wish Peak prosperity would invite Iroquois Valley reps for an interview, so nice they are more accessible…

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Robie, not sure that a “public apology” is necessary. We all sometimes fail to convey exactly the thoughts/message intended. Perhaps those feeling an apology is necessary could read the entire chapter of Galatians 6, perhaps Ephesians chapter 4 as well. I suspect investing in farmland may work well for some, particularly those younger. Spiritual health and wealth is good for all.

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I apologize publicly

Accepted. Forgiven people are forgiving people. I should have dealt this this off line. Back to farmland.
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As someone who considers himself very knowledgeable on the subject (I make the majority of my income leasing farmland), I was impressed with Craig Wichner because he really didn’t give any untrue or misleading statements regarding agriculture or the economics behind it. I suspect however that for Peak Prosperity members this will be considered more of an investment than a lifestyle change in that many members will want a more direct connection (i.e. directly own and/or work on) with the land due to food security concerns. There are two publicly traded farmland REITs that I know of, Gladstone (LAND) and Farmland Partners (FPI). This is the first that I heard of FarmlandLP. I was concerned that it would be a Privately Traded Partnership (PTP) but I checked and at least Fund II is structured as an LLC and distributes a 1099 for tax purposes (anything that uses a K-1 like a partnership is not likely to be a good fit in an IRA due to UBTI). My only concern is the fee, which are quite high at 1.75% of invested capital which switches to 1.75% of NAV (net asset value). I would prefer an income based incentive. I think that the actual income received will be less than the 6% unless Fund II starts farming themselves (which introduces greater risks) since a 4% cap rate is fairly good for farmland. So if you want to invest in farmland without owning the land, compare Farmland LP with LAND and FPI. Otherwise I would encourage you to maybe form a partnership or LLC through Peak Prosperity and buy a small farm where many members are congregated and perhaps you could have a Coop farm.

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We lived on our last place for 26 years. The lot was about 12 acres of mostly second growth hardwoods. The only cutting I did was some thinning to promote growth of remaining timber, and cutting of smaller easily accessible trees for firewood, again thinning.
Before we sold the place my daughter, a forester with lots of experience in these things, looked it over. She knows the place well as she grew up there and spent a lot of time in surrounding woods. Her opinion was that it wouldn’t be worth getting a commercial logger to log the place.
The point is that having a woodlot is a good thing, but it is a long term proposition unless you have a good stand of mature timber. You won’t get that in 26 years.

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Financialization has destroyed most of what was good about America. There is no extra or surplus profit in farming to syphon off. Subsidized Big Ag might but that concept of farming is what is killing the planet. Small family farms are the only way to sustainably produce healthy food and employ the population but it is investors coming in bidding up land prices that makes family farming not viable. I have personally seen farmers get foreclosed on because the banks and seed companies can make more money selling out to “private equity”.
Robie - You have nothing to apologize for. Religious folks do not own the concept moral bearings. I do not have a “religious” affiliation and never have but in my experience I am as or more moral than most. Also we have seen religious folks do plenty of immoral activities over the years. It is my experience with Family farming that even without practicing religion they are all a very moral bunch with strong values.

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How practical is it to harvest and mill your own timber, @doug. I remember reading Chris had purchased a mill. The idea of milling my own 2x4s seems real intriguing.
Maybe I’d have my own mill, just for fun. Maybe I’d hire a professional team to come in and do all the work.
Maybe not cost effective. On the other hand, maybe it is? Lumber getting more expensive and maybe unobtainable for the average person at some point in the future?
How likely is it that governments would make it illegal for individuals to harvest their own lumber? If I understand correctly, Oregon says it is illegal to capture rain water that falls on private property.
Sorry, I’m getting carried away.

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Doug Im not sure but maybe your land or climate isnt suitable for timber growth? My first piece of land was 100 acre, 80 of which was timber which had been logged 8 years prior. 10 years later I have 80 acres of good mature timber.
I live in upstate NY and the general rule is 15 years between cuttings. When I used a logger I was getting about 400 per acre. Now logging myself Im averaging 800 per.
@netleg I agree that religion and morality arent necessarily cojoined. Many people can have a strong sense of spirituality or recognition of a higher power without necessarily following a prescribed religion. Jesus preached against religious dogma and institutionalized faith.
"“Split wood, I am there. Lift up a rock, you will find me”

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our 180 acres is 140 open and 40 timber. Last summer we sold 20 acres of 30yo loblolly pine. It netted 29000.00$ I am 60yo and dream of reforesting in trees native to the Virginia piedmont. The prices were down but I had to get started. Income roughly 25$/acre/yr.
The open ground is in cattle and sheep and produced 13k net in 2020 a very poor year.It requires a lot of attn. Not quite 100$/acre/yr and alotta work.
virtually no inputs other than sweat.

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Netlej
Re: “Financialization has destroyed most of what was good about America. There is no extra or surplus profit in farming to syphon off. Subsidized Big Ag might but that concept of farming is what is killing the planet. Small family farms are the only way to sustainably produce healthy food and employ the population but it is investors coming in bidding up land prices that makes family farming not viable.”
Thank you very much for pointing this out. (I also agree that Robie has nothing to apologize for) This whole discussion about finding a poor landless peasant to become (land)lord of, and getting free shit from in exchange for financialization and ownership of their land is kind of repugnant.
I wish Chris were back.

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>>> our 180 acres is 140 open and 40 timber. Last summer we sold 20 acres of 30yo loblolly pine.
 
Was it close to level ground ?
I have a lot of trees but most of them are on a 40 degree incline.

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We have a surface of sandy loam with a red clay substrate. This is tobacco land. It is the easiest worked most lush soil. In fact the record for cornbushells/acre is virginia.
https://www.dtnpf.com/agriculture/web/ag/crops/article/2019/12/16/grower-sets-new-world-record-corn-2
I am repelled by that record, but it attests to our water table and soil. Mine are “Pamunkey”soils
https://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1237002.pdf
a poor and reluctant typist.

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The keyword you may want to search on is “intentional community”. There’s a lot of different types of ways to collaborate. Here’s one directory site for example: https://www.ic.org/directory/
Then, the following will have a lower “hit rate” because there are a lot of irrelevant projects mixed in. And the goal of these guys is to find workers to help with their projects. But I feel like you will find enough people with similar mindset to yours and those connections are really what you want. Opportunities arise that way, I believe.
http://www.helpx.net/
https://www.workaway.info/
http://wwoof.net
Good luck with your search!