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Unlike so many investment options you have today, farmland is real estate. It is a real asset that you can see and touch. Further it is a durable asset that has been in existence for thousands of years and, if cared for properly, will continue as a valuable resource for generations to come. |
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Similar to a value stock, farmland offers annual cash income plus appreciation in value over time. Farmland ownership is considered a conservative investment, yet returns rival
or exceed treasury or corporate bonds. Average annual nominal returns from 1926 through 2004 showed a mean return of 10.6% for US farmland (USDA). |
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How often has your broker advised you to diversify your portfolio to spread your market risks? Farmland ownership offers you a solid opportunity to do just that. The tandem opportunity of annual income coupled with land value appreciation moves independently of other typical equities markets. |
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The United Nations projects world population to increase from approximately 6 billion today to 9 billion by the year 2050. That’s 1 million more mouths to feed somewhere in the world every 4 days! |
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The USDA Economic Research Service expects incomes in developing nations to grow more than 5% annually over the next decade. As the middle class in these countries grows, a significant portion of new income is spent to improve their diets. |
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The USDA reports a consistent trend in reduction in US farmland acres due to a variety of reasons. Many farmland acres are converted to non-farm use and many times offer attractive prices to land owners selling such farms. |
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Traditional production from US farmland not only feeds and helps clothe the world’s people, but now provides the crops for bio-fuel production. US agriculture’s contributions to the world economy will likely only grow. |
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Steady domestic and international economic growth supports gains in consumption, trade and price. In addition, large increases in corn-based ethanol production affect production, use and prices of farm commodities throughout the sector. These factors combine to result in higher market prices and increasing cash receipts. Net farm income will remain strong and is expected to reach record levels for years into the future. (USDA Long-term Projections, Feb. 2008) |
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Many analysts and investors see the world’s and particularly US agriculture’s most profitable times are still ahead. The combination of world population growth, income growth, shrinking farmland area and the growing variety of products grown forecast a bright future for agriculture. Farmland ownership is a “ground floor” way for any investor to take advantage of the positive opportunities in U.S. agriculture. Not often does the combination of a shrinking supply join a marketplace with unprecedented increasing demand for production at the same time. As production income per acre grows, net income returns are expected to also grow making US farmland an increasingly important natural resource and a rare store of value. |