Why are billionaires buying farmland? 6 reasons you may want to rethink your investment strategy

Golden-blonde fields stretch as far as you can see, punctuated by patches of dense woodland and a few scattered farmsteads.

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The aroma of damp, loamy earth lingers while thick clusters of millet sway in the breeze.

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In the distance, you hear a diesel tractor sputter to life.

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This bucolic scene might seem far removed from the world of high-stakes investments.

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But such a landscape, and many others like it around the world, have become the unlikely playing field for a new breed of investors.

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We’re talking about billionaires buying farmland.

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It might surprise you to learn that some of the world’s wealthiest have swapped stock portfolios for soil profiles — and are betting big on agricultural land.

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So, what’s drawing them to farming?

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And where are they purchasing these parcels?

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Let's look at some of the biggest farm investors and why you may want to add this alternative investment to your portfolio. 

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Why are billionaires buying farmland?

Several of the world’s wealthiest are purchasing farmland as part of their investment strategies.

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But billionaires acquiring agricultural property isn’t a trend. 

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It’s a strategic move for investors to enhance and diversify their portfolios. 

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Here are six main reasons the mega-rich are allocating resources to arable land:

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Reason #1. Strong, stable returns

Investing in cultivated land offers two avenues for capital investment: 

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• Increasing land value 
• Passive income generation from leasing the land (or cash returns)

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These potential returns aren’t lost on high-profile investors. 

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With an ever-growing global demand for food commodities and the farmland required to produce them, both land values and cash returns have seen a solid upward trajectory.

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Consider this data from Ag Decision Maker, which studied Iowa farmland returns over the past five decades:

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• From 1970 to 2021, the market value of farmland grew by an average of 6.7% per year (or 2.7%, adjusted for inflation).
• Farming also generates a regular annual income in the form of rent paid from farmers who lease the land. As the demand for arable land grows and supply shrinks, cash rental rates for farmland averaged 6.1% growth per year.
• Together, these avenues deliver an average total return of 8.8%, after adjusting for inflation.

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This consistent growth is what draws big-ticket investors to the sector. 

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Beyond this, farm investments offer another advantage — their palpable, finite nature. As a resource that can't be manufactured, they ensure steady appreciation.

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Which brings us to our next point…

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Reason #2. Tangible asset

Unlike cryptos, NFTs or bonds, farmland is a tangible asset. 

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You can see it, touch it and watch it fuel economies. 

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This concrete nature gives many investors — billionaires included — a sense of ownership and control.

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Reason #3. Passive income

Farm ownership can generate a steady, passive income stream. Whether through lease agreements with farmers or direct crop sales, well-managed agricultural land can bring a healthy return year after year with minimal involvement from the landowner. 

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This hassle-free cash flow makes it an attractive investment for high-net-worth individuals.

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Reason #4. Low volatility

While many investments swing wildly with market trends and economic events, farmland has shown remarkable resilience. Even during major financial disruptions like the dot-com crash in 2000, the 2008 financial crisis, the COVID pandemic and the bear market of 2022, agriculture property maintained relatively stable performance. 

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MoneyMade analyzed 30+ years of farmland investing data from 1992 to 2022. Its research revealed that farmland had an average volatility of less than 3%.

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This stability, even amid market turmoil, appeals to successful investors.

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Reason #5. Solid diversification benefits

As traditional asset markets become increasingly correlated, the need to diversify becomes more critical. 

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But farmland doesn't necessarily move in tandem with other asset classes.

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And, historically, it has outperformed stocks, bonds, gold and real estate. 

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Many high-profile investors see this as a way to broaden their portfolios and blunt risk. 

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Reason #6. Hedge against inflation

As inflation climbs, many investments can plummet in value. Farmland, on the other hand, has seen its value increase during inflationary periods, making it an effective hedge against rising prices.

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This cushion can be particularly valuable to those with an ultra-high net worth.

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Where are the rich buying farmland?

Wealthy investors are purchasing farm property across a variety of regions within the United States.

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While each investor has unique criteria, they generally focus on fertile, productive regions that promise a solid return.

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The exact locations of these properties often remain confidential for privacy reasons.

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But several states known for their agricultural potential have emerged as prime picks among investors, including:

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• California
• Iowa
• Kansas
• Montana
• Nebraska
• Oklahoma
• Texas
• Wyoming

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So, who are these investors and what’s their level of involvement in farming operations?

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Diving deeper into the data reveals an interestingly skewed pattern.

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Investors, both those actively involved in farming (operator landlords) and those who aren’t (non-operator landlords), own approximately 30% of all U.S. farmland. 

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But here’s what’s striking…

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Landowners who aren't actively involved in farming operations make up a staggering 80% of this farmland investor pool.

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Clearly, farmland's investment potential is drawing interest from a diverse set of investors.

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What billionaires have invested in farmland?

When it comes to billionaires buying agricultural property, several notable names crop up. 

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Here are five high-profile investors and their sizeable farming portfolios: 

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Bill Gates

• Farmland owned: Approximately 270,000 acres, making Gates the largest private farmland owner in the U.S.
• Where: 18 states, including Louisiana, Florida, Arkansas, Washington and California
• Method of investment: Primarily through Gates’ investment company, Cascade Investment
• Timeline: Began investing in cultivated land in 2013

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“The agriculture sector is important,” Gates said in a 2021 Ask Me Anything on Reddit. “ With more productive seeds we can avoid deforestation and help Africa deal with the climate difficulty they already face. It is unclear how cheap biofuels can be but if they are cheap it can solve the aviation and truck emissions.”

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Ray Dalio

• Farmland owned: At least 556,000 acres 
• Where: Australia, other areas unknown
• Method of investment: Dalio invested in his Australian land with his brothers and a family friend; he likely also invests through his hedge fund, Bridgewater Associates.
• Timeline: Has been investing in arable land since 1992 or earlier

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Jeff Bezos

• Farmland owned: Approximately 420,000 acres
• Where: Largely concentrated in Texas
• Timeline: Began investing in farm properties in the mid-2000s (or earlier), when Bezos purchased more than 150,000 acres near Van Horn, TX

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Michael Burry 

• Farmland owned: Total acreage unknown
• Where: Unknown
• Timeline: Began investing in farming in 2010

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“I believe that agricultural land – productive agricultural land with water on site – will be very valuable in the future…,” Burry told Bloomberg. “I’ve put a good amount of money into that. I’m investing in alternative investments as well as stocks.”

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Ted Turner

• Farmland owned: Approximately 2 million acres of “personal and ranch land,” making Turner one of the largest landowners in North America
• Where: Turner owns more than 500,000 acres in Nebraska, rendering the media mogul the biggest private landowner in the state. He also owns 1.1 million acres in New Mexico and is the state’s leading landowner there, too. Additionally, Turner owns land in Kansas, Montana and South Dakota.
• Timeline: Reportedly began buying agricultural land in 1987

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If I’m not a billionaire, how can I invest in farmland?

Although the list of high-profile investors purchasing farms may be growing, you don’t need a nine-figure net worth to capitalize on the benefits of an agricultural investment.

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There are several ways to break into the sector, including direct and indirect investment options.

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How to indirectly invest in farmland 

If you’re not in a position to purchase a swath of farmland, you’re not alone. Instead, you may want to consider one of these options that allow for an indirect investment:

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• Real Estate Investment Trusts (REITs): Farm REITs offer an entry point into agricultural investing without needing to own land. These trusts hold portfolios of properties they manage and generate income from, and investors can buy shares in the REITs themselves.
• Agricultural company stocks: While purchasing stock in agricultural companies isn't a direct investment in cultivated land, it can still give you exposure to the sector and how it performs.
• Crowdfunding platforms: A newer phenomenon, crowdfunding platforms, like AcreTrader and FarmTogether, allow smaller investors to pool their resources and invest in agricultural ventures.

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How to directly invest in farmland 

If you have significant capital to invest — typically upwards of $500k — you can buy a farm like you would any other piece of real estate. 

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Many lenders even offer financing options.

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From here, you have two paths to consider:

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• Buy the land and have it custom-farmed: In custom farming, you’ll hire professional farmers to run all operations (machinery runs, etc.). While you’ll retain complete decision-making control, this approach requires a solid foundation of agricultural knowledge and the time needed to oversee operations.
• Buy the land and partner with a farmer: A more passive option involves leasing your land to farmers. This approach allows you to earn income from the land, either through fixed or yield-dependant rent, without the need to manage day-to-day operations.

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Whether it's through indirect or direct means, farmland investing isn't limited to billionaires. It just takes the right approach.

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The Bottom Line

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Billionaires buying farmland isn’t a trend.

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It’s a strategy for financial security and resilience.

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Agricultural land is an asset class that yields strong returns, stays stable in the face of market turbulence and adds a unique layer of diversification.

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And it’s a signpost indicating where strategic investors might want to set their sights next.

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Now, the next step is knowing how to invest in farmland.

‍Disclaimer: This article is for general informational purposes only and does not constitute investment, financial or tax advice. You should consult with a licensed professional for advice concerning your specific situation.