What is the reason why people invest in farmland?  Most experts will tell you about current returns, long term appreciation, inflation hedge, personal enjoyment, recreation, diversification and in some cases, inheritance of a family heirloom.  These are all valid reasons.  In this article I want to suggest another reason, a reason that overarches and generates the outcomes in the previous sentence.  Farmland investing is investing in a renewable energy asset!

Some may stop reading now because they think I am referring to renewable energy like ethanol, biodiesel, renewable diesel, etc. Don’t stop, because I want to suggest that the energy investment you make in farmland includes much more than fuel for machines, it includes fuel for all of humanity and many forms of life across the globe.  At its essence agriculture is taking energy from the sun, combining that with water and soil (nutrients in a medium) and converting them into some form of energy.

Humans consume crops produced through this conversion of energy every day.  Farmland investing involves investing in assets that produce something a human needs every day, sometimes three times a day.  One US farmer feeds 169 others across the world.  In addition, the farmer grows crops that feed animals that produce meat proteins, dairy proteins, hides for clothing, and by-products for hundreds of other uses.  We talk glowingly about how US farmers “help feed the world”, which is true.  Those products are the essence of farmland investing.

Buy a farm, in doing so you find that you help feed and clothe the world while gaining all the economic benefits of a long-term, rock-solid asset that generates a 5-8% total return year after year. Maybe your crops are used for renewable fuels instead of food, but those are renewable fuels that replace fossil fuels and are less impactful on the environment.  You also can do this sustainably and improve the land over time while impacting the environment less and less each year.

Farmland investing succeeds because it is the basis for producing products that are consumed every day.  Demand is always present and while supply can vary widely, based on weather, demand growth is something that is consistent across all crops.  Farmland enjoys a zero-vacancy rate, consistently generates income that exceeds its cost of ownership, serves as an effective hedge against inflation, all while providing the world’s basic necessity, food.

The Halderman Companies love being a small part of this energy production system, whether for humans or machines. For more than 96 growing seasons, we provided farm management services focused on maximizing returns and enhancing land value over time. Our goal is simple: ten years from now, clients should look back and see steady returns and an asset that is stronger than when they began.

Is it time for you to consider farmland investment so you, too, can enjoy your investment that produces a product everyone needs and uses 3 times a day?  Halderman Real Estate is your knowledgeable, trusted partner to help you find the farm of your dreams!