How to Invest in Farms or Ranches
If you are one of the many who laments the demise of the family farm, you can remain silently sullen or choose instead to do something about its plight. While large commodity-supplying megafarms may still feed the country, the small ranchers and farmers who were once an intrinsic part of America's fabric, are in an eroding minority. The few who have survived have had to become creative in supplementing their income and beefing up their bottom lines. Enjoining the help of outside investors is one viable option to which many farmers are turning.
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Instructions
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Offer your land for their use. One of the simplest and most direct means to assist farmers and ranchers is to offer your land to them. Choose a lease agreement that allows a farmer or rancher to use your existing land in exchange for money or produce. Even land owners in the suburbs can offer their few acres as grazing land or small produce plots in an arrangement that is mutually beneficial.
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Join a CSA. Community Supported Agriculture (CSA) programs are a direct consumer-producer link that is gaining momentum across the country. Through CSAs farmers sell "shares" directly to consumers. The farmer's receive preseason funds that help when cash flow is most difficult. In exchange, consumers are given weekly produce during harvest season in the form of boxed fruits and vegetables. Variations of the programs also exist for meats, poultry and animal products.
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Put your money into funds that specifically support farmers and ranchers. Brokerage firms like Fidelity, Merrill Lynch and Morgan Stanley have commodity and hedge funds that target farming companies across the globe. Ask your broker to invest in these for you.
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Buy shares of publicly traded farms and ranches. Even without the support of a broker, you can invest your money in farms, ranches and supporting companies by purchasing their stocks. U.S. Farms Inc. and Sanderson Farms are publicly traded farm companies, while Bunge Limited (NYSE: BG) is in the global agribusiness.
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Buy land. Land as an investment is not a new concept. However, choosing to purchase land with the targeted purpose of ranching or farming is a growing trend in some areas of the country. Even if you never intend to work the land yourself, leasing agreements can be quite profitable for the investor. Additionally, the land's value increases over time building equity for the investor or a windfall when he eventually sells the property.
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- Photo Credit Dutch cows image by Robert Soen from Fotolia.com
