5 Ways to Invest in Farmland Without Farming Story

Investing in farmland has historically high returns, and you can invest in agriculture with or without purchasing a farm outright.

Why Farmland?

Farmland has historically seen stable growth. In the past 20 years in the U.S., farmland has seen average annual returns of  11% – 12%.

How To Invest In Agriculture

1. Purchasing Farmland Directly

Perhaps the most obvious choice when considering purchasing farmland is to purchase it directly. This option typically requires hundreds of thousands of dollars in investments or a mortgage to pay for the land over time.

2. Real Estate Investment Trusts

A REIT is a group of investors who purchase a farmland portfolio and then lease it to farmers. You can research two of the largest REITs are Farmland Partners Inc. (FPI) and Gladstone Land Corporation (LAND).

3. Purchase Stocks

Another option is to invest in equity in the agriculture industry. These equities support farmland industries, such as fertilizer and seeds, equipment, and distribution or processing.

4. Mutual Funds & Exchange Traded Funds (ETFs)

A third option is to explore mutual funds and exchange-traded funds (ETF). If you are interested in purchasing stocks but aren’t sure which ones will yield the highest returns, you can mitigate risk by purchasing a farming-focused mutual fund or ETF.

5. Invest in Farm Debt

Instead of investing in equity in farms or related markets, you may want to explore lending to farms. Farmers often take on debt each season because the industry is so capital intensive.

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