Owning farmland has been a successful strategy for thousands of years, providing real income in normal times, windfall profits during building booms, and the security of food and shelter in bad times.
As an investment, farmland has historically delivered attractive, diversified, secure, inflation-hedged returns with both current cash flow and long term capital appreciation.
Limited Organic Farmland Growth
Of the 800 million total farmland acres in the U.S. only 0.5% (4 million acres) was certified organic as of 2005. The market for organic food is limited by supply, and organic food production is limited by certified organic farmland, an essential prerequisite for organic food and animal feed. The conversion rate would have to triple from 8.5% per year just to not fall further behind market demand. The Partners do not think this is feasible considering the obstacles to conversion, thus ensuring a continuation of the price premiums received for organic goods. Farmland LP benefits from these trends by providing real solutions.