U.S. Cropland Values Hit Record Highs

Source: AgWeb



If you are interested (as I am) in Real Estate, then allow me to suggest you consider exploring the world of Farmland. It is something I have done for a while, and it is a fascinating rabbit hole to fall into. Not so much as an investor, but as someone interested in how agriculture works (but yes, there is an investor angle here as well).

You can go as deep or shallow as you like.

Your interest does not have to go further than an occasional visit to a farm for a harvest festival, hay ride, or Halloween corn maze. One of my local farms makes amazing pies  — Blueberry Crumble, Raspberry/Peach, and Strawberry Rhubarb are family favorites.

If you would like to go deeper down the rabbit hole, you can track farmland value via the USDA. Explore the regional differences in value, or Cropland and Pastures rents. You can also play with local data sources (E.g., the Cornell Seneca Cooperative). You can search active listings for farm acreage and sales online. It’s not quite Zillow-surfing, but it is still engaging. You can also follow farm-specific Twitter feeds, (I am fond of FarmPolicy).

If you want to become an investor in farmland, it becomes more complicated. Prices have risen to record highs; auctions are +65% over last year, as are acres sold +106%, and dollar value +130%. So it may be a bit late on this cycle. Note also that Inflation drives crop prices higher, and that lets land values and especially rents rise. Price spirals can ensue.

If you have a long-term perspective and want to own non-housing, non-office, productive real estate, it is an option worth exploring. There is lots of due diligence required — don’t just drive up to Vermont and buy the first farm you see with a “For Sale” on it. (Farmers are pretty savvy about selling land).

Regardless, it is a fun area to explore . . .


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