Why pension funds continue to invest in U.S. farmland

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Pension funds investing in farmland is not a new trend. They have long valued the steady income and long-term appreciation of the asset.

However, with farmland's recent explosion into the mainstream as a "hot" investment, people have taken notice how heavily invested into agriculture pension and hedge funds really are.

A recent article posted on Financial Times (The Real Bull Market) takes a closer look at what is fueling the interest of these investors.

The main point that the article makes is that as world population grows, someone is going to have to grow the crops to feed the world. Considering that US contains some of the productive and fertile land in t.h.e world, it stands to reason that investors would take long-term positions in US farmland.

This is not a new opinion.

We've seen numerous forecasters predicting that over the next 50 +/- years farmland would continue to be viewed a a desirable asset as the demand for food increases. If it's one thing that history has taught us, though, it is that nothing is a given.

For the short-term, meaning the next 12-18 months, farmland continues to appear to be a strong market.

However, the variables that help play into farm prices (commodities prices, interest rates, weather patterns, etc.) can change at any time and slow this market down considerably. The buyers that are taking long positions, such as pension funds, have less risk than the buyers who are looking to buy a farm and flip it for a quick profit.

There are owners of vacant condos in Miami and Las Vegas than can tell you that the quick buck in real estate is sometimes easier said than done.

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Chicago  |  October, 26, 2011 at 12:48 AM

An investing firm to check out in this regard is Terra Worldwide www.terraworldwide.com

Chicago  |  November, 23, 2011 at 06:41 PM

I have colleagues who have done business with Terra Worldwide. They are reputable. More information is available on the founder, Cliff Ganschow, at www.cliffganschow.com

Chicago  |  December, 11, 2013 at 03:38 PM

Terra Worldwide LLC could be a fraud! The guys behind Terra Worldwide have been accused of fraud several times. See www.cliffganschow.com

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