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Investors look toward agriculture

Investment money is looking for a home in agriculture, including more interest in the use of farmland as a hedge against inflation.

“Farmland is a growth stock,” Dale Aupperle with Heartland Ag Group, Ltd., said at the Brock Decision 2010 Seminar in Memphis.

“But it’s scary,” Richard Brock, Brock Associates, added. “When you get too many people on one side of a canoe, sooner or later, it will tip over.”

High commodity prices have helped keep the farmland value high, noted Aupperle. “New money is coming into the markets, but is it stable, or is it fickle?”

U.S. farms are still in strong financial shape, according to Liddell. The 12 percent debt-to-asset ratio is up from 11 percent last year, but down from 15 percent in 1999.”

Also helping to maintain farmland values is the ramping up of crop yields due to better technology, breeding and agronomic practices. David Rhylander, marketing lead for Monsanto’s Delta and Pine Land, says Monsanto is setting targets to produce 80-bushel soybeans, 300-bushel corn and 1,300-pound cotton. Rhylander says the yield improvements are much needed to offset less arable land available in the world.

Brock Decisions was sponsored by Brock Associates, Monsanto, Helena, Rabo AgriFinance and Delta Farm Press.

TAGS: Management
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