Farmland investment
- 05/21/2021 – The drought isn’t hurting just almonds, which are one of California’s most valuable crops, but also tomatoes, alfalfa, wheat and other commodities. Drought is afflicting 88% of the American West, up from 40% a year ago, according to the U.S. Drought Monitor.
Drought Imperils Economy in California’s Farm Country – WSJ
Growers are paying four times normal prices for water and letting almond trees die as federal government cuts or ends water allocations
California is gripped in severe drought just four years after emerging from the last one, forcing many farmers to scramble to find enough water. The U.S. Bureau of Reclamation has cut the water allocations for many to zero this year. Last year, when the latest dry spell began, the same farmers were allocated 20% of what they are contracted to receive annually.
Drought is afflicting 88% of the American West, up from 40% a year ago, according to the U.S. Drought Monitor. In California, the mountain snowpack is at 4% of normal, largely as the result of one of the lowest statewide precipitation totals on record and an unusual spring warm-up. Most of the big reservoirs in California have sunk below half of their capacities.
California has a vast network of canals, pipelines and dams built over the past century to funnel water from the snow-rich mountains in the northern part of the state to the semi-arid south and agricultural heartland in the center.
A large farming industry was set up around this system, but in dry years with limited supplies, environmental groups and others often argue that too much water goes to agriculture. Farmers counter that too much is allotted for fish, both farmed and wild.
In 2014-2015, during the depths of the last drought, total farm-related losses in California totaled $5 billion and 20,000 farm hands lost their jobs, according to estimates by the Center for Watershed Sciences at the University of California, Davis. “For agriculture, there is potential to be as bad as 2014 and 2015,” said Jay Lund, co-director of the center.
The drought isn’t hurting just almonds, which are one of California’s most valuable crops, but also tomatoes, alfalfa, wheat and other commodities. The effects are being felt the most in parts of the state where farmers have the lowest rights to federal water, including western reaches of the Central Valley where Mr. Butler and other almond growers are based.
- 05/07/2021 – start to learn investment in farmland
Investing in Farmland: A Real Estate Investor’s Guide
A look at the many ways to invest in farmland.
Why invest in farmland?
The primary reason more investors are turning to farmland as an investment opportunity is that it has a long history of producing solid returns. Those returns come in two forms:
Increases in farmland values.
Crop yields or cash rental payments.
Over the last 50 years, the value of American farmland has risen by about 6.1% per year, with only five down years during that period. Add in the cash rent yields, and the return to investors has been even more impressive. Since 1991, farmland has produced a positive return every year, generating an average annual return of 11.5%, according to the USDA. To put that return into perspective, it has outperformed all other asset classes except the Dow Jones REIT Index during that time frame.
In addition to the above-average total return potential of owning farmland, it provides investors with several other benefits:
Low volatility: Farmland returns have historically had less volatility than most other asset classes, including the 10-year U.S. Treasury Bond, S&P 500, gold, and Dow Jones REIT Index.
Low correlation: Farmland returns typically don’t move in the same direction as the stock market. In many years, farmland has produced a positive return in a year that the S&P 500 has lost value.
Inflationary hedge: Farmland is a real asset that produces commodities like corn and grain. As such, it benefits from inflation since that would boost not only acreage values but also crop income. Because of that, some call farmland a gold-like investment with a yield.
- 05/07/2021 – websites to look for farmlands
https://www.loopnet.com/search/farms/san-diego-county-ca/for-sale/
https://www.landandfarm.com/search/CA/San-Diego/Farm-for-sale/
