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Key Points
- Farmland is an investment that can provide steady returns and low correlation to the stock market.
- Farmland Partners (FPI) is the largest farmland REIT in the US, offering investors exposure to high-quality farmland throughout North America.
- FPI works directly with tenants to maximize profitability and mitigate the risk of default, and investors can visit their site to view a map of their farms for increased transparency.
- FPI pays a quarterly dividend.
- While FPI provides high exposure to farmland, it is susceptible to stock market ups and downs as a REIT, and there are other options for farmland investing.
Farmland, as an asset class, makes for a significant investment. However, you may have heard a statement such as “Buy land; they don't make it anymore.”
With consistent demand for food and other crops, Farmland can provide steady returns over time. However, it's also an investment with a low correlation to the stock market.
You may be asking how you can get involved with a farmland investment. In this article, we review Farmland Partners (FPI) REIT.
As a REIT, it trades on the same exchanges as stocks giving you a high level of liquidity. This makes it one of the easiest ways to gain exposure to farmland. The alternative is buying a farm outright or participating in a crowdfunded farmland opportunity.
Another key benefit of a REIT investment is the dividends. More on this later!
However, publicly traded REITs do come with a few downsides:
- Since they trade on the same exchanges as stocks, they are susceptible to the same ups and downs. As a result, publicly traded REITs are heavily correlated with the stock market.
- Often, these REITs underperform private or less liquid real estate investments.
Nonetheless, should you be interested, there are several things you should know about Farmland Partners (FPI).
What Is Farmland Partners (FPI)?
Farmland Partners Inc is a publicly traded real estate investment trust. The company owns high-quality farmland throughout North America and wants to acquire more. Farmland Partners is the largest farmland REIT in the US by total acreage.
Investors in the trust are collectively helping address the growing demand for food, feed, fiber, and fuel.
Farmland Partners works directly with their tenants to help them lower costs and improve their farms to maximize profitability. This also helps mitigate the risk of default, as investors are collectively the landlord.
As of April 2023:
- Farmland Partners Inc owns/manages approximately 195,000 acres of land
- This is across 20 different states in the US
- Over 100 tenants are currently farming the land
- These tenants are collectively growing 26 other major commercial crops
Right off the bat, investing in a portfolio of farmland versus one individual farm will give you the benefit of diversification. In addition, spreading out exposure across multiple geographies and crops helps mitigate many of the unique risk factors related to farming.
Invest In Farmland Today!
| Platform | Minimum | Link | Accredited Only | Investments |
|---|---|---|---|---|
 | $8,000+ | View Investments | Yes | US Farmland, Timberland, Vineyards |
 | $15,000+ | View Investments | Yes | US Farmland |
Transparency
One of the common complaints investors have about REITs is the need for more transparency. Simply put, it can be difficult at times to determine what you are owning.
With Farmland Partners, you can visit their site and view a map of their farms. You can click on each state and find the farms you invest in.
While they do not have as much data as other farmland investments, such as AcreTrader, it is better than most REITs.
Dividend
All REITs are required to pay out dividends to shareholders, and Farmland Partners is no exception.
- Farmland Partners currently pays a quarterly dividend of $0.068 per share.
- However, back in 2018, they used to pay a dividend of $0.1275 per share
- The premium has decreased significantly
- Based on the share price of $10.55, they are currently paying a dividend yield of 2.26%
Stock Performance
A few years ago, Farmland Partners was under a short seller attack. Often, large hedge funds try to manipulate share prices with short selling and other techniques.
After their IPO and trading at around $13 per share, the stock fell as low as $4.50 per share in 2018.
Now, the stock is trading around $10-11 per share.
