http://profitableinvestingtips.com/investing-tips/invest-in-farmland Invest in Farmland A commonly held belief is that land is a good investment because it always retains its value. If you invest in gold you have a hedge against inflation but if you invest in farmland you have a hedge against inflation and profits from the crops produced there. The Wall Street Journal writes about Farmland Investments. Farmland is attracting growing interest from pension plans, hedge funds and even mom-and-pop investors as they seek to diversify assets and capitalize on an agriculture-industry slump that has pushed down land prices in some regions. Financial-services giant TIAA-CREF announced Tuesday that it has raised $3 billion for its second global farmland-investment partnership, exceeding its initial target of $2.5 billion. The fund, which will invest in North and South America and Australia, has lined up commitments from institutional investors, including the New Mexico State Investment Council and the U.K.’s Greater Manchester Pension Fund. Investors are betting farmland will yield good long-term returns as global food demand rises with growing populations and wealth in Asia, Africa and elsewhere. The amount of arable land is expected to increase only modestly, at best, due to urbanization and a lack of acreage suitable for crops. The tag line for this sort of investment is gold with a coupon. A farmer can invest in farmland, live of the property and grow crops or raise livestock. An outside investor who chooses to invest in farmland is betting that the price of land will go up and that there will be a healthy cash flow from the property. How realistic are these expectations? The Price of Farmland What are prices like in the American Corn Belt and where are they likely to go? AG WEB provides insight into Iowa farmland values. The scales have tipped for Iowa farmland values. After several years of dramatic increases, this year marks a drop in value. For 2014, the average value of an acre of Iowa farmland is $7,943-a drop in value of $773, or nearly 9%, per acre from 2013. “This the sharpest decline since 1986,” says Mike Walsten, editor of LandOwner newsletter. But, Walsten says, you should keep these numbers in perspective. “The value of Iowa farmland is still double what it was 10 years ago,” he says. The chart from AG WEB shows the average price per acre of Iowa farmland since 1950. The rise in prices since 2000 is reminiscent of the rise of gold. The difference is that the correction has occurred later than with gold. Will farmland follow gold to lower prices? Factors Driving Historic Farmland Prices Midwestern (Corn Belt) farmland experienced two value peaks in the twentieth century. One was in the period before and immediately after World War I and the other was during the inflationary surge of the 1970’s.

1. Invest in Farmland
By www.ProfitableInvestingTips.com

2. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
A commonly held belief is that land is
a good investment because it always
retains its value.

3. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
If you invest in gold you have a hedge
against inflation but if you invest in
farmland you have a hedge against
inflation and profits from the crops
produced there.

4. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
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5. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The Wall Street Journal writes about
Farmland Investments.

6. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Farmland is attracting growing
interest from pension plans, hedge
funds and even mom-and-pop
investors as they seek to diversify
assets and capitalize on an
agriculture-industry slump that has
pushed down land prices in some
regions.

7. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Financial-services giant TIAA-CREF
announced Tuesday that it has raised
$3 billion for its second global
farmland-investment partnership,
exceeding its initial target of $2.5
billion.

8. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The fund, which will invest in North
and South America and Australia,
has lined up commitments from
institutional investors, including the
New Mexico State Investment
Council and the U.K.’s Greater
Manchester Pension Fund.

9. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Investors are betting farmland will
yield good long-term returns as
global food demand rises with
growing populations and wealth in
Asia, Africa and elsewhere.

10. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The amount of arable land is
expected to increase only modestly,
at best, due to urbanization and a
lack of acreage suitable for crops.

11. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The tag line for this sort of investment
is gold with a coupon.

12. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
A farmer can invest in farmland, live
of the property and grow crops or
raise livestock.

13. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
An outside investor who chooses to
invest in farmland is betting that the
price of land will go up and that there
will be a healthy cash flow from the
property. How realistic are these
expectations?

14. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The Price of Farmland

15. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
What are prices like in the American
Corn Belt and where are they likely to
go?

16. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
AG WEB provides insight into Iowa
farmland values.

17. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The scales have tipped for Iowa
farmland values.

18. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
After several years of dramatic
increases, this year marks a drop in
value.

19. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
For 2014, the average value of an
acre of Iowa farmland is $7,943-a
drop in value of $773, or nearly 9%,
per acre from 2013.

20. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
“This the sharpest decline since
1986,” says Mike Walsten, editor of
LandOwner newsletter.

21. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
But, Walsten says, you should keep
these numbers in perspective.

22. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
“The value of Iowa farmland is still
double what it was 10 years ago,” he
says.

23. http://profitableinvestingtips.com/investing-tips/invest-in-farmland

24. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The chart from AG WEB shows the
average price per acre of Iowa
farmland since 1950.

25. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The rise in prices since 2000 is
reminiscent of the rise of gold.

26. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The difference is that the correction
has occurred later than with gold.

27. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Will farmland follow gold to lower
prices?

28. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Factors Driving Historic
Farmland Prices

29. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Midwestern (Corn Belt) farmland
experienced two value peaks in the
twentieth century.

30. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
One was in the period before and
immediately after World War I and
the other was during the inflationary
surge of the 1970’s.

31. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Before you go and invest in farmland
at this point on the price curve read
the late 1970’s article about factors
affecting agricultural land
prices.

32. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
In the twenty years that preceded
1920 there was a 245% increase in
the value of farmland (including
improvements) before land values fell
sharply.

33. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Today’s [as of 1977] escalation in
land values – 364 percent between
1957 and 1977 – prompts some
pointed questions.

34. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Have land values reached their peak?
If not, when will they plateau if ever?

35. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
Will they decline and, if so, will the
descent to sudden or gradual?

36. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The answer to the 1977 era descent
question is that values in the 1980’s
fell rather rapidly as interest rates
rose, inflation came under control and
the stock market went into an
extended climb.

37. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
The writer notes that while
productivity should be what drives
farmland prices (coupled with
demand) the perception of land
scarcity is a big driver of farmland
prices.

38. http://profitableinvestingtips.com/investing-tips/invest-in-farmland
If you want to invest in farmland you
should ask yourself if interest rates
will go up and if the current farmland
price curve is going to follow the
examples of the twentieth century and
drive farther before flattening out.