The Farmland Company Review 2023: Best Farmland Investment?

Farmland is an asset class that is growing in popularity. Especially as more and more celebrities like Bill Gates become more open about their farmland investments. These investments make sense: farmland has a low correlation to the stock market and has produced consistent returns since the early 90s.

Unfortunately, owning a piece of farmland on your own is not feasible for most people. But with crowdfunding platforms and other investing platforms dedicated to farmland, the process has never been easier.

In this article, we provide a complete review of The Farmland Company and perform a deep dive into how to get started. Let's jump in!

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What is The Farmland Company?

The Farmland Company is just what its name implies. It is a farmland investment company that is dedicated to helping farmers succeed.

Their unique and forward-thinking business model is a community-based farmland investment built by farmers, for farmers. The company motto is simple: “Find Farmer, Find Farmland, Farm, Repeat.”

Its mission is restoring access to farmland for the next generation and revitalizing local food economies. They accomplish this by:

• Acquiring and leasing farmland
• Seeking willing and able farm tenants who intend to own the land in the near future
• Connecting community-based investors to local food providers

The company is committed to delivering positive social and environmental impacts while generating financial returns for investors. The cooperative membership is open to community-based investors with capital they intend to invest for the longer term that will create a positive impact in farming communities.

With this in mind, they seek capable and vetted farmers with a focused, financially viable business and those who want and need to eventually buy more farmland.

Why Invest In Farmland?

Farmland has certainly proven itself as a top asset class. This is due to its low volatility and ability to produce consistent returns. Additionally, the demand for food continues to rise as the world's population grows.

Many investors look for ways to diversify their assets. One way to diversify your portfolio is to invest across a number of asset classes. Farmland is a great alternative investment to traditional stock market investing.

Farmland Company Findings

Agriculture is an integral part of the economy, culture, and landscape. Consider the following facts:

• The nation’s 2.04 million farms keep over 900 million acres of land in agricultural production
• Farms support more than 3.3 million jobs
• They generate in excess of $1.05 trillion annually

As a growing number of farmers prepare to retire, it is critical that young farmers are positioned to step up and carry on this legacy. But young farmers are struggling, and finding affordable farmland is their biggest challenge.

Nearly 100 million acres of U.S. farmland are projected to change hands over the next five years.

Individual investors, real estate investment trusts, pension funds, and investment banks are increasingly turning to farmland to turn a profit. The Farmland Company believes now is the critical time to ensure that land remains available, accessible, and affordable to farmers.

The company is taking a close look at how to raise capital and restructure how emerging farm businesses are funded and operated.

How The Farmland Company Works

The Farmland Company supports farmers with secure land access by providing lease-to-own arrangements.

To kick-start the process, The Farmland Company actually identifies high-quality farmland. Once a plot of land is identified, the company raises capital and purchases the property. After acquiring the property, they enter into a contract with a farmer. They give the farmer a lease-to-own contract that starts with a 5-year term.

At the end of the term, the farmer exercises the option to purchase the land, and investors are paid out.

The company is organized as a cooperative. These cooperatives are beneficial in the following ways:

• Work for the sustainable development of their communities through policies approved by their members
• Are voluntary organizations, open to all investors able to use their services and willing to accept the responsibilities of membership
• Are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions
• Work for the sustainable development of their communities through policies approved by their members
• Are autonomous, self-help organizations controlled by their members

Farmland Company Investments Help To:

• Provide available, accessible, and affordable farmland to farmers
• Create stability, autonomy, and opportunity for farmers to make long-term planning and investment decisions
• Rebuild local food traditions and economies
• Grow healthy food, healthy soil, and healthy farms

Farmland Company Values

The company has a few values that guide them. These values not only help farmers but also help the environment.

• A New Path To Farmland Ownership: Its values reflect those of a company started by a group of farmers and the minimalist style they promoted. They take an approach toward restoring access to farmland used by farmers. The company seeks to prioritize a transparent and predictable path to ownership for its farmers, while allowing profit for its member investors.
• Farmland For Farmers: All of its farmland purchases are conservation easement protected and are driven by the experience and wisdom of individual farmers according to their unique business needs.
• User-Owned, User-Benefited, and User-Controlled: They recognize that the structure of capital inherently alters the way businesses operate. Therefore, they work steadily to put their values into practice by structuring and operating with cooperative principles.
• Soil Health, Animal Welfare, and Social Fairness: The Farmland Company supports regenerative organic farming operations that prioritize soil health, animal welfare, and social fairness.

How To Invest

The current structure is a common share in the cooperative, which is $1000. Investors can purchase other class shares in $5000 dollar increments.

Investors will still get only one vote, regardless of shares owned.

Additionally, both accredited and non-accredited investors can participate in rural investment cooperative ownership. This is a key competitive advantage to its model. It is replicable across communities and other U.S. states and lowers the minimums for community-based investors.

Funds and shares are held on a project basis, but investors have the option to roll into a new project after farmers exercise the purchase option.

If you want to invest with The Farmland Company, you will need to reach out to their investment team.

Pros

• Democratic organization that follows a cooperative model in which every stakeholder has a vote.
• The company supports regenerative organic farming operations that promote soil health, animal welfare, and social values.

Cons

• All farmland is located in Montana.
• It is active investing in which stakeholders vote on initiatives, rather than passive investing where investors leave the land management to the farmland companies.
• Unique structure lacks long-term proven successful results for both investors and farmers.

Farmland Company Review: Conclusion

The Farmland Company has a forward-thinking business model that lets investors buy into projects for just $1,000, although investors can buy more shares in $5,000 increments. This is notable since many farmland funds and property managers reserve themselves for accredited investors with enormous personal wealth.

The company focuses on supporting farmers for growth and profitability, which in turn benefits the local community.

A key feature of an investment with the Farmland Company is the voting rights. Every investor has a vote on the operations of a particular investment.

If an investment with the Farmland Company interests you, then reach out to their investment team and check out their website!