When it comes to building wealth, many financial advisors will advise that it’s prudent to take your time and diversify your portfolio. Given that there will be inevitable periods of economic instability when you can’t readily predict the market’s activity, diversifying makes a lot of sense.

But where do you put your money when you are worried about maintaining your net worth in a turbulent world? A traditional roadmap to deploy assets can include agriculture. Now it’s time for you to consider using farmland investments as a hedge against inflation.

Farmland Value Correlation With the Consumer Price Index

Examining different metrics of the country’s economic activity helps investors make comparisons about where to deploy assets in the face of inflation.

“You must invest in inflation hedges, and no other investment offers the long-term protection against inflation with so many other advantages as does farmland,” noted ThinkRealty. While you can’t find an investment that will align exactly with increases in inflation, agriculture gets you pretty close.

ThinkRealty explained that farmland “has a 70 percent correlation with the Consumer Price Index (CPI) and a 79.84 percent correlation with the Producer Price Index (PPI),” with research supported by the TIAA Center for Farmland Research at the University of Illinois.

Ongoing Need for Commodity Agricultural Products

Farmland will naturally remain productive for the basic reason that everyone needs to eat what’s grown on farms and nations around the world depend on American agriculture to feed their hungry populations too.

Investing News weighed in, noting that John Coast Sullenger of GAIA Capital told CNBC that agriculture serves as a hedge against inflation because of projections showing ongoing growth well into the future.

Sullenger said “The FAO (Food Agriculture Organization) is saying we have to increase food production to meet demand by 50 percent by the year 2030, and by 80 percent by the year 2050. So that growth is there.”

And InvestmentNews shed light on the fact that “Wealth managers report that their clients are increasingly interested in direct investments in timberland, farmland, mines and real estate.” You may have a similar motivation to get into agriculture now.

Anticipating Prices for Commodities Will Rise

Costs at the supermarket will increase during times of profound inflation. So making an investment in agriculture can help you protect your portfolio, making for a better outlook.

Attic Capital notes that “Farmland is a great hedge against inflation because it produces the commodities that typically rise in price during inflationary environments.”

The result is a boost in revenue for the farmers while also lifting the value of the land itself. So, with “farmland investment, you get the best of both worlds during rising inflation.”

Advice on Agriculture Investments From Farming Experts

When making the leap to invest in agriculture as a way to protect your worth against the ravages of inflation, you can save time and effort by partnering with the only farmer-owned investment portal for farmland. The experts at FarmCek focus on agriculture and source only the highest quality farmland investments to offer to it's network of investors. You can create a complimentary account so that you can be kept in-the-know when these exciting farmland investment opportunities become available.

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