Fa Farmland Loading... : Investor Sentiment and Bull/Bear Views

Farmland has become a very attractive investment because data centers, solar arrays and other non-agricultural uses are competing for land, while land is one of the few non-depreciating assets; institutions and wealthy investors are buying it, pushing values beyond what farmers can afford.

Farmland is a tangible real asset that provides stable, boring returns and a sleep-well portfolio component, suitable for long-term wealth preservation amid high uncertainty.

He prefers to look at fixed income, real estate, farmland, listed equities, and FIIs because they generate income and can all be compared by their yield. He compares NTN-B yields with stock, farm, and real estate yields; buys when the asset is cheap and the income is high versus price, then sells when the yield becomes small and rotates to another high-yield asset. If the market reprices sooner, he earns faster; if not, he can hold the asset for its income, potentially for 100 years.

Stan Kroenke is buying nearly 1 million acres of New Mexico ranch land, becoming the largest private landowner in the US. Farmland investing is becoming more popular because data center developers may pay up to 10 times the original land cost to build data centers on former farmland, turning land into a scarce asset with new industrial demand. Land is back on the menu.

Farmland investing is becoming more popular because data-center developers need land and may pay multiples of agricultural value for suitable sites. Stan Kroenke's large New Mexico ranch purchase and the broader data-center buildout highlight land as a strategic asset.

For an inflation-hedge portfolio he favors hard assets bought at the right valuation, including real estate and farmland that hold value and have real use; commodities are in a long-cycle hard-asset regime and add to inflation tailwinds, though a recession could reduce commodity demand.