Uncovering a Once-in-a-Lifetime Shift in Farmland Investing

Episode #323 | August 14, 2023

Episode #323 | August 14, 2023

Uncovering a Once-in-a-Lifetime Shift in Farmland Investing

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey welcome Artem Milinchuk to the show. He's the founder and head of strategy for FarmTogether – a farmland investment manager. The company's mission is to support sustainable and profitable farming, while also providing investors with opportunities to share in the rewards from farming.

Dan and Corey kick off the podcast by discussing the latest Consumer Price Index ("CPI") and Producer Price Index ("PPI") reports. While the CPI reading came in at 3.2% overall inflation, certain components within the CPI are much higher. Inflation is still here, and now it's just a matter of what direction it goes and what the Federal Reserve does next. Corey warns...

The PPI is accelerating right now, and the PPI typically leads the CPI by a month or two.

Next, Artem joins the conversation to share the benefits of farmland investments. Farmland boasts comparatively lower volatility than stocks, real estate, gold, and other asset classes. Artem highlights that the charm of farmland lies not only in its resilience during inflationary and recessionary periods... but also in its capacity to diversify portfolios. He points out...

This is a product that is going to be needed for the next hundred years. You know that things are not going to fundamentally change. People will have to eat, and there's no uncertainty around what the underlying asset class produces.

The discussion then shifts to how elevated prices and interest rates have impacted farmland investments. Plus, Artem talks about the farmland market as a whole. With a net income margin that never falls below 15%, it remains a very attractive industry for investors.

While 98% of the farmland market is currently family owned and only 2% is held by institutions and investors, Artem shares that the average farmer is about 60 years old. Since many folks in the younger generations don't want to be farmers, there's bound to be a large consolidation and big turnover in land ownership. He says...

In the next 20 years, the [U.S. Department of Agriculture] estimates two-thirds of farmland will change hands.

Finally, Artem talks about his specific career in investing other people's money in farmland. Since 1992, he has made about 10.5%. He compares farmland investing with U.S. Treasurys and then circles back to why farmland serves as such a good inflation hedge.