The FarmTogether team incorporates risk-management strategies at every stage of our work – from research to due diligence to follow-up. Our team of experts is involved at every step of the investment process, starting with choosing only top-quality institutional-grade farmland, all the way through to helping you manage your returns.
Agriculture investments can be some of the most reliable out there. Studies have shown recent and historic trends in market stability when it comes to farmland investing. As a matter of fact, U.S. farmland is considered the best in the world and has a near-zero vacancy rate. Because there is a finite amount of farmland available, farmers are inclined to renew leases on land and make purchases to expand their property lines even when recent profitability has been lower.
At its core, farmland is competitive real estate. Your investment goes towards the acquisition of land to lease out to farmers, and your returns come from profits on lease payments. Seeing as farmers are eager to rent land aggressively, the farmland you invest in is highly valuable.
Farmland has low volatility compared to most other asset classes. An article in Investing Daily called agriculture a “well-positioned hedge” against stock market volatility, claiming that “agriculture has the properties of a late-cycle investment because of the sector’s projected robust and stable growth for decades to come.” Even during adverse market conditions, like we’re facing in the present day, farmland has proven to be a secure investment. The NCREIF has not reported a negative year in almost two decades.
Over the past ten years, American farmland has risen in value over 6% each year, and averaged ~10% total annual returns (income + price appreciation) from 1992 to 2018. During stock market downturns, like the unprecedented volatility we’ve experienced as a result of the COVID pandemic, a diverse portfolio that includes a wide variation of investment types can benefit your investment portfolio. While traditional investments like stocks and bonds show downturns, farmland steadily brings in returns uncorrelated with the rest of the stock market.
No investment offers a hedge against inflation like farmland, not even the most popular one – gold. Even in years when every other asset saw losses, such as, for example, the 2008-2009 financial recession, the farmland index was up 20%. Farmland’s returns are uncorrelated with the rest of the market, making it an exceptionally strong investment in volatile market years and for the diversification of your portfolio.
The FarmTogether investment team is committed to providing investors with additional confidence throughout the investment journey; mitigating risk is an integral part of our process at every stage.
The most common risks that first-time farmland investors might face are overpaying for land or selecting the wrong operator-partners. We monitor these risks by being conservative in our underwriting and partnering with highly experienced farmers and farmland investment managers. The properties we offer you for investment are only of the highest caliber; every farm that appears on our platform is one that we, ourselves, would invest in.
To ensure this, our investment committee sifts through hundreds of properties and completes thorough due diligence. This includes industry analysis, soil, tissue, water rights, on-farm equipment, and farm's potential for capital improvements. We also enlist the expertise of industry professionals by hiring external teams to assist in our evaluations. From there, you have agency, and we at FarmTogether are completely transparent. You have the choice of farms to invest in, deciding the location and crop.
On our side, we do our best to completely inform you of all risks involved in your choices, from potential weather conditions to risk trends of individual crops. We make sure to offer you a wide range of crops to choose from, allowing you to diversify your portfolio based on market trends and crop success rates, to mitigate risk. Additionally, we track land valuation closely, using local appraisers, and give you a report on land value periodically. Our goal at FarmTogether is to aid you in confidently investing in American farmland and to grow the agricultural economy together. We will offer you assurance throughout our entire process, and we are one call away if ever you feel unsteady.
At FarmTogether, we are veteran investors. Our team is composed of cross-industry experts with years of investment and agribusiness experience under their belt. We provide you with the opportunity to invest in farmland because we genuinely know it to be a safe, stable, and attractive long-term investment.
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.