Why Invest in Farmland in 2025?

February 5th, 2025

Investing in farmland is a reliable uncorrelated investment that provides diversification, and inflation protection. Regenerative practices takes it one step further by boosting productivity and promoting long-term stewardship of the land. Investors see its potential for a steady income and long-term growth.

At LandFund Partners, we acquire and manage large plots of row crop farmland in the Mid-South region of the United States. Our leading expertise in regenerative agriculture seeks to improve soil health, conserve water and increase overall productivity margins.

Why An Investment in Farmland Stands Out

What is Regenerative Farming?

Regenerative Farming, also known as Regenerative Agriculture, is a suite of farm practices that seek to utilize nature to improve soil health, increase farm profitability, and preserve the environment for future generations.  In a 2023 study, Boston Consulting Group found a “potential 15%–25% return on investment for farmers once they have shifted from conventional agriculture to incorporating more regenerative practices at scale.”

How Does Farmland Compare to Other Investments?

An investment in farmland offers stability and steady growth. Historically, farmland exhibits low annual return correlation to other real estate asset classes and almost no correlation to equities, bonds and treasuries.  Farmland’s unique macro drivers and low leverage as an asset class contribute to its historical resilience through economic cycles.

 Why Are More Investors Considering Farmland?

Institutional investors and family offices are increasing their allocations to farmland, recognizing its stability and long-term value. Over fifty billion dollars have been invested in U.S. sustainable farmland and regenerative agriculture projects to date, according to Conservation Finance Network's report. This private sector interest underscores confidence in farmland as a resilient and profitable asset.

Farmland has a historical track record of strong, stable growth and lower volatility. Global population growth is a key driver of increasing food demand, ensuring the enduring value of agricultural land. There are also certain tax incentives and an income generation component to some investments in farmland.

How Does Regenerative Agriculture Fit into ESG Investing?

Regenerative farming appeals to investors who want strong, reliable financial returns and measurable environmental impact. Regenerative farming improves soil health, increases farm productivity and conserves water. This in turn makes farmland a powerful ESG-aligned asset. As sustainability regulations increase and corporations focus on environmental responsibility, regenerative farmland is positioned as a long-term solution that aligns financial performance with positive environmental impact.

What Are the Long-Term Benefits for Investors?

Regenerative farmland builds lasting value. Healthier soil can lead to better yields, lower input costs, and stronger land resilience. These improvements aim to boost financial performance, promote long-term stewardship of the land and preserve the environment for future generations.

Financial Performance and Portfolio Benefits

How Does Farmland Protect Against Inflation?

Farmland serves as a strong inflation hedge. Unlike commercial real estate, which depends on tenants, farmland continuously produces essential goods. Regenerative practices further enhance its value by increasing productivity and reducing dependence on costly synthetic inputs. As food prices and land values rise, farmland continues to appreciate.

Are There Tax Advantages for Farmland Investors?

Farmland investments come with tax benefits such as conservation easements, depreciation deductions, and government grants for sustainable agriculture.

How can Wealth Managers Integrate Farmland into Client Portfolios?

An investment in farmland offers strong risk-adjusted returns, making it a valuable addition to a diversified portfolio. Investors can gain exposure through direct ownership, farmland funds, or private placements. At LandFund Partners, we structure investments to meet different risk profiles and liquidity needs.

Managing Risks in Farmland Investments

How Can Investors Ensure They Acquire High-Quality Farmland?

At LandFund Partners, we follow a rigorous acquisition and due diligence process. We focus on farmland with strong soil health, reliable water access, strong tenant base and high long-term productivity. Our due diligence process includes soil testing, historical yield assessments, and on-site evaluations to ensure every property aligns with our principles.

What Metrics Should Investors Track to Measure Success?

Investors should monitor soil health improvements, yield consistency, cost efficiency, and water retention. Other key indicators include commodity pricing trends, lease income stability, and rental rates.

The Future of Regenerative Farmland Investments

How Are Emerging Technologies Improving Farm Profitability?

Advancements in precision agriculture, AI-driven farm management, and soil health monitoring are making farming more efficient and profitable. These technologies aim to optimize crop rotation, reduce input costs, and improve sustainability metrics.

A Future-Proof Investment

An investment in regenerative farming can offer financial stability, asset appreciation, and measurable environmental impact. Institutional interest is growing. Consumer demand is shifting toward sustainability and environmentally-friendly lifestyles. New technologies are improving farm efficiency.

With a deep understanding of the market, strong local relationships, and expert management, LandFund Partners are experienced farmland professionals dedicated to creating value for investors through the acquisition, improvement, and management of high-quality, irrigated row crop farmland. 

To learn more and explore farmland investing, contact [email protected].

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