Why investors worried about inflation should dig into farmland

追加: 2026-06-02

[00:00:07]David, what type of investors should be interested in investing in US agriculture right now?

[00:00:15]>> Greg, I would argue virtually all investors should be considering investing in US agriculture right now.

[00:00:20]It's historically been a really attractive asset class for institutional investors with long investment periods and time horizons looking for capital preservation. In this world that is very volatile and we see an emergence of AI concentration in public markets, agriculture is one of the few places where retail investors as well can find diversification in addition to institutional investors. And how do you specifically do it over at Homestead Capital?

[00:00:46]At Homestead, we invest in both equity and credit solutions in agriculture. So, we're a solutions-oriented firm. We're looking to help both farmers on the ownership side either by selling or buying property and also on the credit side by extending credit and loans to farmers.

[00:01:02]>> And how big is the opportunity because when people invest in agriculture, they generally do it in a stock, maybe Deere Archer Daniels Midland or something to that effect, but people don't go out and buy farmland. So, how do you help them do it?

[00:01:19]>> Well, we invest in a series of of different funds where we can acquire farmland and deploy that capital into farmland in the United States. On the credit side, we're talking a 624 trillion or billion-dollar market. On the equity side, a 3.7 trillion-dollar market. And so, these are very sizable markets in the US. We also have some of the best title law in the world as well as the most robust insurance industry in the world with crop insurance and other types of insurance products, which makes farming and investing in farmland here quite more attractive.

[00:01:55]>> And you're have partners with MassMutual and Bearings, right? How are you working together with those folks?

[00:02:01]>> Yes, Homestead proudly developed and announced a partnership with MassMutual and Bearings earlier this year. And so, we are deploying credit loans through those programs, and we're helping farmers in a variety of different situations. The USDA projects that in the next 20 years, half of all farmland is going to trade hands, which is just an astounding number. And additionally, we also have farmers who are going through succession planning or just looking to acquire a neighbor's property to bolt onto their existing land. And so, if you're in that situation as a grower, it may be difficult to find the capital required to, you know, acquire that that additional property. And so, we work with those folks to do so.

[00:02:42]>> Speaking of finding capital, how liquid are these investments?

[00:02:47]>> It depends. It is real property, and so it is not a buy-sell on an index like a stock.

[00:02:54]But, we see a very liquid market in US farm real estate. There's tenant pools that are active. We see very low occupancy rates, and so land is typically leased almost entirely leased in the industry per year.

[00:03:08]So, we see it as a very healthy rental market and a very fluid transaction market.

[00:03:13]>> And then finally, what about owning agriculture as a hedge against inflation? Does that work?

[00:03:21]>> Absolutely. So, if you think about agriculture, it's three F's: food, fuel, and fiber. It's across our economy. It's in pencils and pens. It's in your clothes. It's on your dinner plate. It's everywhere. And so, ag commodities develop a very close positive correlation to inflation, just given the fact that it's embedded in our economy from fuel to fuel to fiber. And so, that's why we believe, you know, agriculture is one of the most attractive and one of the strongest hedges in a period where you're expecting either higher inflation or even stagflationary conditions.

[00:03:56]>> All right. Well, thanks Seth for coming on and talking about it.

[00:03:58]>> Thank you, Greg.

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