Do you have something in common with Bill Gates?
Farmland. It’s a tremendous long-term investment and, like most alternative investments, you can get some idea of its value by who chooses to buy it. When it comes to farmland, by far and away America’s biggest owner is now Bill Gates. Yes, that Bill Gates. In fact, the self-avowed computer nerd owns at least 50,000 acres more than his next closest competitor in the farmland ownership game.
Bill Gates has been investing in productive farmland for years and now owns a massive portfolio of 242,000 acres (97,976 hectares) spread throughout Washington, California, Idaho, Wyoming, Colorado, New Mexico, Arizona, Nebraska, Iowa, Wisconsin, Illinois, Michigan, Indiana, Ohio, North Carolina, Florida, Mississippi, Arkansas and Louisiana.
Although not a lot of information is available regarding how the land is being utilized or what is being grown, Bill’s support for sustainable farming is well known. According to the Bill & Melinda Gates Foundation website, the foundation aims to “support country-led inclusive agricultural transformation across sub-Saharan Africa and South Asia.” Hopefully the same is true for his lands in the U.S.
Savvy investors have been snatching-up farmland for decades. Large university endowments, celebrities, pension funds and specialty investment banking divisions have been grabbing farmland like they’re not making it anymore. Wait… they aren’t making it anymore, which is why it is so precious and steadily increasing in value!
Bill isn’t the only wealthy person to plow (pun intended) his money into farmland. The top 100 largest American landowners include the likes of Ted Turner, the Ford family and Jeff Bezos. Although not one of the largest farmland owners, did you know that Oprah Winfrey owns an avocado farm?
So, what is it that the wealthy know about owning farmland that most don’t? Why put their money in farmland when there are so many other options? For starters, farmland has historically outperformed the Nasdaq, gold, real estate, timber and the S&P 500. If that didn’t grab your attention, how about the fact that farmland has an overall lower risk than traditional investments or that farmland has steadily increased in value year-over-year?
Did you lose money in the 2008-2009 Great Recession? Did you lose money when the stock market tanked in April of last year? Farmland owners didn’t lose any sleep because they knew their investment was secure and growing in value.
Taking inflation into account, farmland in the U.S. is producing more with roughly the same input costs (seed, fuel, fertilizer, maintenance) over the last 60 years. The application of new scientific methods, sustainable methodologies and artificial intelligence has steadily driven higher yields.
Buy some farmland and you, too, can join the ranks of smart investors. Oh, and you can slyly mention at your next office party or neighborhood barbecue that you own your own farm – just like Oprah and Bill Gates.