January 16, 2026: Does Farmland Belong in a Portfolio?
I attended the Land Investment Expo in Des Moines this week and gained extremely valuable insights and perspectives from farmers, investors, attorneys, and other experts on farmland. The topics were varied and I’ll be sharing my takeaways and insights in this newsletter over the next few weeks. I think you’ll want to follow this series.
Does Farmland Belong in a Portfolio?
Investors often start building their portfolios with stocks and bonds. The focus early on should be building good saving habits and diversifying investments. Eventually good habits are established and the investment portfolio is broadly diversified and highly liquid. However, there comes a point when investors realize there is more to the market than publicly-traded stocks and bonds.
When an investor has broad public market diversification and is highly liquid, then alternative investments can be considered. Alternative investments range from venture capital to multifamily apartments to private credit.
Farmland was the focus of the Land Investment Expo for its unique characteristics. It produces in-demand commodities, it can generate rental income, it tends to appreciate, farming is a subsidized industry, it can have recreational purposes, it is not correlated with the market, it is eligible for like-kind exchanges, and it is very illiquid. Altogether, this makes farmland incredibly unique compared to most other assets. For these reasons farmland can serve a purpose in a diversified portfolio.
There’s no right or wrong answer to the question, “Should I buy farmland as an investment?” Only your personal circumstances (and very careful financial planning) can come to a conclusive answer. Here are some questions to ask yourself:
Am I comfortable with purchasing an illiquid asset?
If I need cash, would I have to sell farmland?
How long do I plan to hold farmland as an investment?
Will I farm it myself or will I lease it?
What is my exit strategy?
Do I have sufficient liquidity and diversification outside of farmland?
Do I have concentration risk from purchasing too much?
Do I have the proper insurance, advisors, business structure, and estate plan to manage farmland?
By no means is this an exhaustive list and only a comprehensive financial plan can help you arrive at an answer.