When building a portfolio, you may be tempted to stick with traditional stocks, bonds, mutual funds, and exchange-traded funds and stay away from nontraditional investment opportunities. For many, the idea of investing in agriculture is unfamiliar and seems too unconventional since it does not receive as much attention in mainstream investment discussions. Yet investments in farmland and timberland are much more common than you think, as many of the world’s largest investors already understand the benefit of agricultural investing and how it can help them preserve and grow their wealth. Not only do these investments offer steady returns and desirable tax benefits, they can offer investors a chance to pursue their dreams of owning farms or ranches.
Read moreHow to Expand Your Farm with Equity Crowdfunding
It’s not uncommon for farmers, ranchers, and landowners to fall victim to a foreclosure from the bank. In fact, there was a 40% decline in net farm and ranch income in 2015. So what other options can you visit before giving a bank control of your land? Trading some of your land equity for cash from an investor may be the best decision you make.
Read moreInvesting in Agriculture vs. Investing in Stocks
The stock market is where most investors invest the majority of their money, but is that really the safest place for it? Some analysts have called the current investing environment “the everything bubble” and are predicting that the next financial crisis could eclipse the one of 2007-2008. Lofty equity valuations along with continued low yields have driven more and more people towards alternative investments to protect and grow their wealth. Commercial real estate, precious metals, oil, and gas are well known alternative asset classes; agriculture is somewhat lesser known, but nonetheless important to consider. How do agricultural investments stack up against investments in more traditional stocks?
Read moreWhy Invest in Agriculture?
There is no better asset to own than one that increases in value over the long term and keeps pace with inflation. So, what if you could invest in something that never gets to a zero value? What if you could invest in something tangible that produces community benefits? According to one study, one of the last things people are willing to cut from their budgets is food. The population is only increasing, and with it the demand for goods is increasing as well. Investing in agriculture means supporting an industry and lifestyle, keeping farmers in the business of farming, and keeping your investments more secure than they would be in the stock market.
Read moreThe Tax Advantages of Investing in Agriculture
Investing in agriculture is a relatively low-risk way to diversify a portfolio, it provides tangible community benefits, but it can also offer investors unique tax advantages. There are several different tax benefits you may be eligible for as an investor, depending on in the type of crop and how the deal is structured. Below, we explore some of the most common tax advantages associated with agricultural investments.Investing in agriculture is a relatively low-risk way to diversify a portfolio, it provides tangible community benefits, but it can also offer investors unique tax advantages. There are several different tax benefits you may be eligible for as an investor, depending on in the type of crop and how the deal is structured. Below, we explore some of the most common tax advantages associated with agricultural investments.
Read more5 Ways to Make Money With Investments In Agriculture
There are many reasons to invest in agriculture: it is a low-risk investment that keeps pace with inflation and increases in value over the long-term, it is a tangible asset that provides benefit to the community, and it can diversify a portfolio. But how exactly does an investment like this make money? Depending on the investment and the type of farm, investors can profit through several different ways. We’ve covered five of the most common ways agriculture generates returns below.
Read moreWhy Row Crops Make A Smart Alternative Investment
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Similar to stocks or other traditional assets, agricultural investments can include many different sectors within the industry as a whole. With all of the available options, how does one decide which types of crops to invest in? One of the most common options is row crops. These commodity crops‒such as wheat, corn, and soybeans‒are staples of almost every country’s diet, and have historically been used by investors as a hedge against inflation. In addition to being consumed, these products are often used in feed for livestock and are the raw ingredients of almost everything we eat. The need for these crops will never subside; grains, corn, and soy are so prevalent in the food industry that demand is guaranteed to stand the test of time. The United States is the largest grain exporter in the world by quite a significant margin, and recent price stability is a good sign for both farmers and investors alike.
Read moreWhat Are Alternative Investments and How Does Agriculture Fit In?
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It’s no secret that the stock market is the most common choice for most investors attempting to build their nest eggs. Millions of Americans regularly add stocks to their retirement accounts with the expectation that their hard-earned dollars are safe. Market cycles and inevitable corrections are a normal part of investing. However, some analysts are predicting that the next stock market crisis could eclipse that of 2007-2008. Cash, the traditional safe haven for investors, is not attractive due to persistent historically low interest rates, and large cash positions are continually eroded by inflation. This largely unprecedented environment has investors scrambling to protect their financial wealth and secure yield through alternative investments.
Read moreLooking For A Sweet Investment? Try Chocolate!
What do tonight’s dessert and your next investment have in common? Potentially chocolate, or cacao plants, at least. Consumer demand for specialty cacao beans continues to grow and is actually outpacing farmers’ ability to grow it in some areas. The demand for specialty or flavored beans used in premium dark chocolate goods is rising even faster than the traditional bulk cacao beans used in other candy that many farmers are used to growing. Like many other soft commodities, the production of cacao is concentrated in a small group of mostly developing countries in the tropics. These farms are susceptible to extreme weather, conflicts, credit shortages, and lack of working capital. Even so, cacao farms present an attractive option for investors looking for relatively low-risk opportunities.
Read moreHop Up Your Portfolio
Craft beer is sweeping the nation and changing the beverage industry. Parts of the farming industry have also undergone some major changes thanks to the surge in popularity of small-batch brews. Craft beer uses more key ingredients per batch than their large, national competitors. According to a report from the U.S. Department of Agriculture, the average craft beer uses 3-7 times as much malt per barrel as a mass market beer. In addition to malt, which comes from barley, the demand for hops to brew IPAs has increased dramatically.
Read moreBring Your Investments South of the Border
Though sometimes overshadowed by Brazil’s political turmoil, the country’s agriculture sector nevertheless remains strong and competitive in the global market. There are large tracts of underdeveloped land that hold much potential for investors willing to put in the necessary capital to convert pastureland to farmland. It is expected that the world population will surpass 9 billion by 2050, meaning food production will have to increase by 70% to meet demand. Brazil is perfectly suited to accommodate this growing demand due to the availability of land.
Read moreHow Equity Crowdfunding Is Different From Kickstarter
Crowdfunding is probably a word you have heard thrown around more and more in the past few years, but you may still be unsure of exactly what it encompasses. That’s a reasonable response because crowdfunding has come to mean different things to different people. There are two major types of crowdfunding: donation-based crowdfunding like Kickstarter or GoFundMe, and investment, or equity crowdfunding. Most people are generally familiar with platforms like Kickstarter, but may not have as much experience with equity crowdfunding. While equity crowdfunding also raises money via an internet platform, the two are vastly different. To clear up any confusion between the two different types of crowdfunding, we have outlined the major differences between them.
Read moreWhat You Should Know About Non-GMO Investments
Genetically modified organism (GMO) crops were first introduced to the market over 20 years ago as an environmentally-friendly solution to the problem of producing food for a rapidly growing world population. In many parts of the world, they are still seen as the solution for malnutrition, like these bananas that were created to provide children with vital nutrition they were lacking. They are genetically engineered to include traits such as resistance to weeds and pests, allowing farmers to use fewer pesticides. However, in some cases, weeds adapted and became more resistant to herbicide, meaning farmers had to increase their use of it. In addition to the concerns about the safety of ingesting GMOs, consumers began to worry about the health concern of more herbicides being consumed. Recently, the popularity of non-GMO crops has risen, as consumers seek out GMO-free products and farmers return to planting conventional seeds.
Read moreCrowdfunding for Agriculture
Agriculture is a broad, ever-changing field that is rapidly advancing to keep up with global consumers and increase yields and profits. A more slowly-evolving sector has been access to financing. Equity crowdfunding is an emerging option to help farmers obtain capital.
Read moreCapital Investments in Poultry
America consumes more chicken than any other country, driving a massive demand for poultry production. There are around 25,000 family farms involved in poultry production, and as demand for poultry products continues to rise, so does the need for poultry farms. It is becoming increasingly common for large companies to offer multi-million dollar contracts to farmers to raise chickens. In this arrangement, the company will provide the animals and feed, and the farmer will house and care for the birds. This arrangement ends up demanding a sizeable upfront investment on the farmer’s end, as he must develop the infrastructure of his farm and build large barns for the chickens.
Read moreDiversifying Your Portfolio With Agriculture
We’ve covered the many benefits of investing in agriculture, and we often highlight the ability to diversify a portfolio. But what does that really mean? Diversification is important for investors, financial planners, and fund managers alike, as it can help protect a portfolio during a downturn in the market. When other, riskier investments are performing well, it can be easy to forget about (or avoid) investing in safer, low-risk investments that don’t promise a large, immediate return. Nevertheless, diversifying a portfolio is essential and agriculture can make a great addition by providing stable returns with very low risk. Agricultural production is one of the oldest investments out there, and can also be one of the most stable and profitable.
Read moreA Little Pork in your Portfolio
Americans have been eating pork for centuries, ever since the first hogs were imported to the United States in 1539. Nowadays, 42% of red meat eaten in the U.S. is pork, and that number has been continuously increasing throughout the past few decades. By the end of 2018, the USDA predicts that demand for pork in America will meet or exceed that of beef. We also export the majority of the world’s pork and pork products, so the future for hog farmers and their investors looks bright.
Read moreThe Top 10 Investment Trends in Agriculture
The huge variety of crop choices can be overwhelming to investors new to the agriculture asset class. An option for choosing potentially profitable investments is to follow society’s food trends. Many Americans these days are heavily dedicated to eating clean, local, organic foods. Trending diets and popular foods are raising the value of these crops to farmland owners and investors.
Read moreHow to Invest in Agriculture With Your IRA
An Individual Retirement Account (IRA) is a type of savings account that is designed to help you save for retirement and offers many tax advantages. Many employees end up with significant balances in their IRAs funded by roll-overs of their 401k plans after they retire or leave a job. Others build them up slowly with regular contributions. One of the best things about an IRA, as opposed to an employer-sponsored retirement plan like a 401k, is there is a vastly larger selection of investment options available within the account. Traditionally, investors only consider stocks, bonds, mutual funds and exchange-traded funds when choosing investments for an IRA. However, these are not your only options. Agriculture can be a great addition to any portfolio, providing a low-risk option that generates stable income in the form of profit from the farm and capital gains as the land appreciates in value.
Read moreWhat is My Farm Worth?
Whether you are in the market to sell or just curious, land-owners often wonder how much their farm is worth. There are many factors that make up a farm’s value. Property location, type of crop, soil, and physical condition of the land will all be taken into account, so it can be overwhelming to try and put a dollar value on your land. Not to mention, family farms have a certain sentimental value that should also be taken into consideration. Luckily, there are a lot of different ways to approach evaluating your land’s market value.
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