Farmland price surge leads to even more demand
BOSTON, March 19 (Reuters) – As a teenager in Wisconsin, Perry Vieth spent his summers baling hay in a neighbor’s field. Four decades later, Vieth is farming again. This time, however, the former fixed-income trader owns the land.
“At the end of 2006, I took a look at the markets, didn’t like what was on the horizon and decided to move into hard assets,” Vieth says.
He isn’t the only one betting on the farm these days.
During the last several years, investors have taken notice of the swelling prices and hearty returns that come with productive farms. Individuals and funds are increasingly seeing farmland as an ideal hard asset class.
Farmland generates not only regular income but also capital appreciation and can be used as a hedge against inflation. Another benefit: farmland returns tend to be immune to stock or bond fluctuations, making it a good diversification tool.
“A lot of people like to say ‘It’s gold with a coupon,'” says Chris Erickson, managing director at HighQuest Partners, an agribusiness consulting firm.
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