FarmTogether Study: Farmland Investing During Uncertain Times
The study illustrates farmland’s historical resilience in the face of financial turbulence, demonstrated by the asset’s strong performance since the onset of the COVID-19 pandemic and subsequent market turbulence.
Farmland investment manager FarmTogether released a new study that illustrates farmland’s historical resilience in the face of financial turbulence over the last three decades, demonstrated by the asset’s stable performance since the onset of the COVID-19 pandemic and subsequent market turbulence. The study, titled “Farmland: A Historically Stable Asset During Uncertain Times,” examines farmland’s performance in the context of several major asset classes, including equities, bonds, commercial real estate, and REITs.
“The last few years, even weeks, have been challenging to navigate from a portfolio management perspective,” said David Chan, Chief Client Officer and Head of Business Development at FarmTogether. “This study comes at a critical moment for those searching for uncorrelated, defensible alternatives for real capital preservation.”
The study found that while many sectors across the global economy continue to experience negative pandemic-induced challenges, farmland remained a reliable asset throughout this tumultuous period. Despite early headwinds led by supply chain disruptions and reduced demand for certain products, farmland investments experienced net positive growth each year over the last three years, outpacing the performance of each asset analyzed in the study.
The study attributes farmland’s performance throughout this period, and several decades prior, to the asset’s historically low volatility, low correlation with traditional assets, and rising cropland values, which are sitting at a record $5,050 per acre in the US. The study additionally reverberates farmland’s historical role as a hedge against rising prices during inflationary environments; since the onset of the pandemic, farmland returns have had a 0.97 correlation with the Consumer Price Index (CPI).
The study analyzes trends in cropland values, income, and other factors that can impact the performance of farmland investments. FarmTogether collected data from a range of sources, including USDA market reports and the National Council of Real Estate Investment Fiduciaries (NCREIF) Farmland Property Index, a quarterly report that measures the investment performance of farmland properties acquired in the private market for investment purposes only.
The paper is available for download at FarmTogether.com.
About FarmTogether
Through FarmTogether.com, accredited and institutional investors can enjoy unparalleled access to institutional-quality farmland offerings in prime growing regions across the US. Their all-in-one platform facilitates access to this vital asset class through a variety of products, including crowdfunded farmland offerings, 1031 exchanges, sole ownership bespoke offerings, and the Sustainable Farmland Fund. FarmTogether’s team and partners are cross-industry professionals with extensive experience in farmland investing, investment management, agriculture, and ag-tech demonstrated by $1.2B+ of collective deployed capital. Since its founding in 2017, FarmTogether has funded over $170 million in assets under management.
Contact
Rebecca Bauer
rebecca.bauer@farmtogether.com
SOURCE FarmTogether Inc
