Producing 25 percent of the world’s food supply, the United States agriculture sector is the most productive in the world, with California leading the nation as the largest producer and exporter of agricultural products. With over 400 commodity crops, California grows nearly half of all U.S. grown fruits, nuts and vegetables, generating over 35 billion dollars in annual revenue. California is positioned to continue to lead the United States in agricultural production and provide food for the growing world community through modern technological advances, well-managed natural resources, efficient crop production, a robust transportation infrastructure, and a superior agricultural supply chain. These unique advantages minimize the traditional risk factors associated with agriculture while maximizing the long term profit potential for farmland investment.
WHY FARMLAND INVESTMENT?
Over the last 100 years, U.S. farmland has provided consistently high returns comparable to the S&P 500 Total Return Index, outperforming traditional asset classes such as stocks, bonds and treasuries. U.S. agriculture is ideal for long term investors seeking safe, inflation hedged income and is considered a favorable risk adjusted investment because it is not directly affected by the fluctuation of traditional asset classes. U.S. farmland has experienced a steady increase in value since World War II, except for four years in the mid 1980s. Farmland continues to increase in value because of the increasing global demand for agricultural products and the continual decrease of the availability of arable land. Farmland is a hard asset that many investors consider a more favorable investment than other tangible assets such as gold, because farmland offers:
- Current-cash income
- Capital appreciation
- A hedge against inflation
- Favorable diversification potential