Why Farmland and What Makes It Worth The Title “The Future of Investing”?
In today’s episode, we will speak to Artem Milinchuk the founder and CEO of FarmTogether.
Farm Together is a crowdfunding platform for farmland investing. Farmland investing entails investing in land housing a variety of crops, such as cornfields, that produce corn and wheat for our everyday food consumption. We all have to eat so in this sense farmland investing is a solid (and recession-proof) foundation that has a place in your investment portfolio. I reviewed the platform a couple of weeks ago and it is the type of alternative investment that makes the most sense to me and that is why I invited Artem.
He will give us a brief introduction to farmland investing, what the expected returns can be, what to pay attention to, and most importantly why he decided to start FarmTogether and why farmland investing can make sense to add to your investment portfolio.
Listen here:
…or listen on Apple Podcasts
This episode is for you if you are looking at diversifying your well-established investment portfolio and/or if you are eager to learn more about a “new” alternative asset class.
Key Takeaways:
- Investing in Farmland is similar to Real Estate. You are essentially investing in land that produces crops.
- Everything that goes beyond stocks and bonds is considered alternative, mostly for historical reasons.
- Returns of farmland investing:
- Come from the fixed rent and the revenue share from the farms.
- The typical returns range from 7-15%. Farmland investing has outperformed all major asset classes in the last 30 years.
- Price appreciation and cash flow: Farmland is becoming scarce (you probably heard this quote before from Mark Twain: “Buy Land, they do not make it anymore”) and people want to eat better. Strong demand and limited supply.
- Farmland investing is uncorrelated to the stock markets, it moves in its own fashion. (During Covid flat, resilient).
- Main risks:
- Purchase price (risk of overpaying the price of the land).
- Access to water (and rights for water).
- Weather events.
- Demand fluctuations for food.
- Mitigating risk by investing for the long term.
- It is difficult to find information, it is scattered and not accessible widely to the public as for traditional investments. You will need to read as much as you can and put a bit more trust into experts than for a traditional financial advisor.
Who is Artem?
Artem has over 11 years of finance experience in food, agriculture, and farmland. Prior to founding FarmTogether, Artem was employee #1 and CFO/VP of Operations at Full Harvest Technologies, a now post-Series A B2B platform for buying and selling produce. He previously worked at Ontario Teachers’ Pension Plan, Sprott Resource Holdings, E&Y, and PwC. Artem holds an MBA from The Wharton School and a BA and MA in Economics from the Higher School of Economics.
RESOURCES
- Website: FarmTogether
- Review: FarmTogether Review 2021: Should You Invest In US Farmland?
- E-mail: info@farmtogether.com
- Instagram: @farmtogetherhq
- Twitter: @FarmTogetherHQ
- Book recommendation:
- Best purchase under 100 dollars: A good chef’s knife and a sharpening stone to cut your fresh produce!
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