Investors seeing farmland as safer bet than stocks

[Liberal_in_LA]

Investors seeing farmland as safer bet than stocks

Wary of fluctuations on Wall Street, more wealthy Americans, private funds and foreigners are putting money into parcels of cornfields, fruit orchards and other U.S. agricultural products.

September 19, 2010|By P.J. Huffstutter, Los Angeles Times

Brian van der Brug, Los Angeles TimesReporting from Kern County, Calif. — As investors tire of Wall Street's roller coaster, more of them are plowing their money into land — farmland.

Few people understand this shift better than farm manager Carl Evers.

On a recent morning, Evers steered his pickup truck through a Central California almond grove, his drawling sales pitch at the ready. Evers is co-founder of Farmland Management Services, which runs about 30,000 acres of nut groves, fruit orchards and wine grape vines for a Boston investment firm. Sunburned and stocky, tugging down his wide-brimmed hat, he talked about how farmland — and the food it produces — is the safer bet these troubled days.

"You want to throw your money into something you can't touch?" said Evers, 50. "Or do you want to put your money here, into soil and sun, into food that feeds people around the world?"

It's the fourth time this year Evers has wandered through these trees and given his spiel to pension fund managers, hedge-fund operators and hungry investors on behalf of Hancock Agricultural Investment Group. He's reeled it off many more times over the phone.

Farmland has become hot. Average U.S. farm real estate prices — including the value of land and buildings — have nearly doubled in the last decade to $2,140 an acre, according to the U.S. Department of Agriculture's National Agricultural Statistics Service. Wells Fargo, the nation's top agricultural business lender in total dollar volume, said demand prompted it to increase farm lending 12% from 2008 to 2009. Since the recession began in December 2007, financial analysts say, agricultural investments have easily outperformed the Standard & Poor's 500 index.

http://articles.latimes.com/2010/sep/19/business/la-fi-farm-land-grab-20100919

[Dawson Leery]

1. Ever wonder why so many immigrants open food service businesses?

This is why.
Come to New England (and the NYC area). Greeks own most of the diners. Smart.
Imagine opening a "high end" clothing boutique in this economy?

Also, for farmers, the subsidies are plentiful.

[DJ13]

2. The public tit of farm subsidies pays better than dividends

[KansDem]

4. My thought exactly!

[KansDem]

3. Funny? No mention of the subsidies that come with the agricultural industry...

"You want to throw your money into something you can't touch?" said Evers, 50. "Or do you want to put your money here, into soil and sun, into food that feeds people around the world?...and gets you a whole shitload of taxpayer money to boot. That's real 'Murika!"

I guess these "investors" would rather take our money up front then wait until their investments turn sour...

[DJ13]

7. I agree!

:hi:

[jobycom]

5. This is startlingly like the end of the Roman Empire and the beginning of manorialism.

The wealthy began to buy up farms in the countryside because of the tax shelter of large farms, and when they controlled so much of the land, small farmers began turning their farms over in exchange for the right to work the farms and be protected from the bad economy. Soon most farmers worked for private individuals on super-farms (latifundia) owned by someone else, and the landholders became their own governments, and it took a thousand years to fix--longer in Russia.

"The Grapes of Wrath" starts out that way, too.

[Greyhound]

6. What a shock!

The parasites wreck the economy and then turn to snapping up real assets at fire-sale prices.

We've never seen this before...
:eyes: