Why farmland now?

April 30, 2020

BY Alexander Kalis

By Nuveen

Amidst unprecedented market volatility, a durable and consistent investment with compelling upside

  • Considered a safe haven investment, farmland has proven to be a reliable store of value through times of economic tumult – exhibiting durable valuations and attractive levels of income, both of which are uncorrelated to competing assets.
  • Financial yields from farmland are inherently tied to food prices, which have not been negatively impacted during previous pandemics, and have been supported by stable supply-demand dynamics to-date in the current pandemic; thus, farmland investments can be expected to remain a strong inflation hedge.
  • Despite ongoing shifts in where people are consuming foodstuffs, transitioning to home-cooking and away from dining out, farmland return characteristics are not expected to differ compared to past downturns.
  • Independent of the benefits farmland offers to portfolios in light of the impacts of COVID-19, it is a compelling time to invest in agriculture due to imminent productivity gains and the associated influence on farmland returns.

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