Should i invest in agriculture

John Deere has emerged as a leader in the category and the technology, and, paired with its industry-leading farm equipment, has led to a boom in the stock. Increased demand for animal-free proteins is driving a boom in plant-based meats. A handful of nontraditional stocks also merit your consideration. One focus is engineering high-protein, neutral-tasting chickpeas, which could become a next-generation plant-based protein source.

For example, Beyond Meat relies on pea protein for its products, but it might be tempted to switch at least some supply to chickpeas if the product lives up to the hype.

Chemical-based pesticides and fertilizers are poised to dominate their respective markets for the foreseeable future, but investors should know that living technologies are also in production and may see significant growth in the years ahead. Biologicals are microbe-based treatments of soils or crops designed to boost yields, improve plant defenses against pests, and potentially reduce dependence on chemical inputs. Individual investors can gain exposure to the emerging opportunity in a few ways.

From its acquisition of Monsanto, Bayer now has the leading biologicals brand on the market through a partnership with Novozymes. From brick-and-mortar to ecommerce and beyond, take advantage of the changing retail industry and make money by investing. Flavors and fragrances are high-margin products mostly manufactured through synthetic chemistry, but specialty agriculture has a place in the market, too.

Vertical farming, a method of growing crops using layers or shelves to conserve space, is a hyped technology, and newly public AppHarvest NASDAQ:APPH gives investors their first opportunity to get pure-play exposure to the new farming technique. Finally, water is a crucial component in agriculture, but it is also a limited resource, and global water consumption is expected to significantly grow over the next generation. A rapidly expanding global middle class and increasing global population will raise per-capita caloric demand and shift preferences to more protein-heavy foods.

It will require all hands on deck, with some new technologies sprinkled in, to meet the challenge -- and agricultural companies like those above are hard at work on these projects. Is your portfolio exposed to the opportunity? Now that the early hype has worn off, I'm looking to add these three stocks to my portfolio at a discount. Could this partnership give Beyond Meat a competitive edge in the plant-based meat space?

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Government is due to spend on agricultural subsidies over the next decade. This cash injection should help to increase the return on your investment. As populations continue to grow, so does the need to increase agriculture production. This suggests that investing in agriculture can be a strong and fruitful venture, not only for you, but for a community, as land continues to appreciate year after year. Your email address will not be published. Why Your Investment Is Good for Agriculture Farming is a learned skill that is handed down along with farms generation after generation.

Specialization has become important due to the increased complexity of farming and the need to be a low cost producer. Investing in outside business ventures is a way of diversifying income sources while continuing to specialize labor and management resources. The investment may act as a type of hedge against low commodity prices.

Livestock enterprises have traditionally served this purpose. When grain prices are low, income from the cropping system may be low, but the low grain prices increase the returns from the livestock enterprises. Farmers may use an investment in a corn ethanol business or other agribusiness venture for the same purpose. Of course, if ethanol prices are low there may not be much profitability in either corn production or ethanol production.

All start-up business ventures have the potential for rewards but hold the risk of failure. Assessing the relationship between risk and returns plays an important role in your investment decision. The most sought after investments are those with low risk and high returns.

However, these are rare and usually find sufficient investment quickly. Conversely, the investment opportunities you may see most frequently are those with high risk and low returns.

These are not the ones in which you are interested in investing. Conversely, some individuals like the prospect of going after a high return investment, even if the risk of loss is high. An important aspect of your investigation is to identify the form of the future payoff from the business. Is the business model designed to provide an income stream of returns annually into the future?

This is often the model used for business ventures past the farm gate such as commodity processing. The typical business ventures of this type in recent years have been corn ethanol. Conversely, many start-up businesses are created to be sold.

However, farmland has been growing as an asset class for investors in recent years as new ways to invest in the sector have emerged. Here's a look at how an investor can add some farmland to their portfolio. The most obvious way to invest in farmland is to directly purchase usable cropland or pastureland and rent it out to a farmer or rancher. This method of investing in farming has a sizable upfront cost since an investor would likely need to purchase a large plot of land.

Investors that buy land as a means to invest in farming have several options, each of which has its share of pros and cons:.

Two publicly traded real estate investment trusts REITs currently focus on acquiring farmland and leasing it to farmers:. Farmland Partners is the largest of the U. It mainly focuses on farmland used to grow healthy foods such as fruits, vegetables, and nuts. Any investor with a brokerage account and enough money to buy one share can invest in these farmland REITs, making them the most accessible and lowest-cost way to invest in farmland.

However, because they trade on stock exchanges, they do have some market risk. The company focuses on owning a portfolio of organic farmland. Several companies have formed in recent years to provide access to farmland investments using the internet. However, most of these farmland crowdfunding platforms are only open to accredited investors i. AcreTrader is a crowdfunding platform that provides accredited investors with direct access to farmland. Instead of holding the legal title to the physical acre of land, investors own shares in a limited liability corporation LLC that holds legal title.

FarmFundr is a crowdfunding platform that allows accredited investors to invest in a variety of opportunities like farmland and agricultural facilities. FarmTogether is an online marketplace for farmland investing. It provides accredited investors with direct access to pre-vetted U. Investors can invest directly in specific farms or in a fund that holds several farm investments.

Farmland LP focuses on buying commodity farmland and converting it into more valuable organic farmland. It offers accredited investors the opportunity to participate in a private equity fund that has the flexibility of eventually becoming a REIT and going public. Harvest Returns is a crowdfunding platform offering a variety of agricultural deals that are mainly open to accredited investors.

Steward is a crowdfunding platform focused on investing in sustainable farms. It aims to provide farmers with capital in the form of loans to sustain and expand their farms. Farmland has historically been a good investment.

Unfortunately, not many investors have been able to benefit from this asset class, given the high upfront costs of buying farmland.