How to Invest in Agriculture: Five Easy Ways to Profit ($$$) Without Farming
If you are looking for a unique way to invest your money, you may want to consider investing in agriculture.
Agriculture is necessary globally to feed people and animals alike, so many see investing in farmland as recession-proof. While investing in a farm specifically isn’t for everyone, there are a few options for people interested in this type of investment.
Purchasing Farmland Directly
When considering purchasing farmland, perhaps the most obvious choice is to purchase it directly. Even if you are not a farmer, direct ownership in farmland can produce high returns. This option typically requires hundreds of thousands of dollars in investments or a mortgage to pay for the land over time.
Real Estate Investment Trust
Purchasing a farm outright can be incredibly expensive, and many expenses go along with farming. These expenses include seed and supplies, equipment such as tractors, paying for labor, and more. One solution to this is farmland REITs (Real Estate Investment Trusts).
Another option is to invest in equity in the agriculture industry. Several publicly traded companies in the farming sector and investors can invest in stock in these companies. Some of these equities support farmland industries, such as fertilizer and seeds, equipment, and distribution or processing.
Mutual Funds & Exchange Traded Funds
A third option is to explore mutual funds and exchange-traded funds (ETF). If you are interested in purchasing stocks but aren’t sure which ones will yield the highest returns, you can mitigate risk by purchasing a farming-focused mutual fund or ETF.
Invest in Farm Debt
If you would instead not invest in equity in farms or related markets, you may want to explore lending to farms. Farmers often take on debt each season because the industry is so capital intensive. Typically, a farmer will finance expensive equipment such as tractors and pay them off over several years. They likely also have a mortgage for their land.
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