Fractional Real Assets & Farmland

Farmland Investing

Platforms like AcreTrader, FarmTogether and their mechanics.

Investment Overview

Farmland investing provides fractional ownership in agricultural properties generating returns from land appreciation (3-6% annually) plus crop income (4-6% annually). Leading platforms: AcreTrader (80+ farms, $10K minimums), FarmTogether (40+ farms, $10K-$50K), Farmland LP ($15K minimums). U.S. farmland valued at $3T total with <5% institutionally owned, leaving massive opportunity. Investment thesis: Inflation hedge (food prices rise with CPI), population growth drives demand, climate change reduces arable land. Farms typically held 5-10 years with quarterly crop income distributions. Prime Midwest farmland (Iowa, Illinois) offers best risk-adjusted returns.

Market Context & Trends

Farmland prices increased 6% annually (1992-2022) per USDA, outpacing inflation (2.5%). However, commodity crashes cause volatility: corn fell from $7/bushel (2012) to $3.50 (2016), pressuring farm values -15-20%. 2020-2024 saw rebound as food inflation surged. Institutional investors (TIAA, Hancock, Manulife) now own 3% of U.S. farmland (up from 1% in 2000). Crowdfunding platforms democratized access starting 2017. Row crops (corn, soybeans) offer lower risk/return than permanent crops (almonds, grapes) which deliver higher yields but weather-sensitive.

How to Invest in Farmland Investing

AcreTrader: 80+ farms across Midwest/South, $10K-$25K per farm, target 8-12% total returns

FarmTogether: 40+ farms (row crops, permanent crops), $10K-$50K minimums, 8-12% IRR target

Farmland LP: Diversified farmland fund, $15K minimum, 7-10% target, quarterly liquidity attempts

Farmland Partners (FPI): Farmland REIT, 180+ farms, 160,000 acres, 3-4% dividend, public (liquid)

Gladstone Land (LAND): Farmland REIT focused on fresh produce (berries, vegetables), 4-5% dividend

Key Platforms & Access Points

AcreTrader: Largest farmland crowdfunding, 80+ offerings, 40,000+ investors, $500M+ transacted

FarmTogether: Institutional-quality farmland, detailed due diligence, soil reports, operator vetting

Farmland LP: Permanent capital fund structure, attempts quarterly redemptions (not guaranteed)

Farmland Partners (FPI): $600M market cap REIT, 180 farms across 18 states, row crop focus

Gladstone Land (LAND): $800M market cap REIT, fresh produce farms (berries, leafy greens), 4-5% yield

Key Investment Metrics

CSR2 rating: Corn Suitability Rating for Midwest farmland; 85+ = premium soil quality

Water rights: Irrigated farmland worth 2-3x dryland; verify transferable water rights

Crop diversification: Corn/soybean rotation reduces risk vs. single crop monoculture

Operator experience: Experienced farmers achieve 10-20% higher yields; vet management carefully

Lease structure: Cash rent (fixed, safer) vs. crop share (variable, higher upside but downside risk)

Risk Considerations

Understanding these risks is critical before investing in farmland investing.

Commodity price volatility: Corn prices swing 30-50% annually; impacts farm income and values
Weather/climate risk: Droughts, floods, freezes destroy crops; insurance covers 70-85% (not 100%)
Illiquidity: AcreTrader/FarmTogether lock capital 5-10 years; early exits require 20-30% discounts
Operator risk: Poor farm management reduces yields 20-40%; family farmer retirements create uncertainty
Regulatory changes: Farmland zoning, water restrictions, subsidy cuts impact returns

Related Investment Opportunities in Fractional Real Assets & Farmland

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