Farmland as ´gold with a coupon´

An article  in the Wall Street Journal gives arguments to invest in farmland now:

“Softer farmland values are creating buying opportunities.” and “a little bit of pain in farm country makes the investor’s job easier.”

“Investing successfully in farmland can be difficult. The market often is opaque and hyper local with deals sealed privately in rural cafes or in small-town auctions, unlike more structured asset classes including residential or commercial real estate. Farmland sales and price data also are far more limited than in other real-estate segments, though more companies are working to increase the availability of such information. ” And that is exactly why we aim at making the Uruguayan farmland market transparant. We can provide information on soil quality of specific properties and details of recent transactions in the direct area.

Investors are betting farmland will yield good long-term returns as global food demand rises with growing populations and wealth in Asia, Africa and elsewhere. The amount of arable land is expected to increase only modestly, at best, due to urbanization and a lack of acreage suitable for crops.

Farmland is part of a broader push by investors into “real” assets—physical property—which typically trade at a low correlation with traditional stocks and bonds. Farmland also generates income from rent paid by farmers, leading some to call it “gold with a coupon.”