The bill allots as much as $23.5 billion in assistance to farmers, a key constituency of President Trump’s, in the middle of an election year.
U.S. farmland has historically outperformed other asset classes. Based on its unique characteristics and benefits, farmland is considered to be a good investment, regardless of current economic state.
Farmland returns have been shown to be positively correlated with inflation.
Farmland provides good diversification benefits due to the low or negative correlation of returns with equities and fixed income investments.
Farmland provides returns in two forms:
Cash Yield – annual cash payments from farmers renting the land
Land Appreciation – value of asset will increase with the expected increase in land values
Appreciated value of a $1000 investment placed in 1991 without consideration for taxes, dividends, or other distributions.
Data provided from the TIAA Center for Farmland Research, University of Illinois; and National Council of Real Estate Investment Fiduciaries, Total Farmland Returns.