Investing in Farming
We’ve all heard of Jeremy Clarkson, Clarkson’s Farm, and Diddly Squat Farm Shop. Has this given you the desire to kick start your farming journey? Maybe you’re interested in the investment portfolio aspect and making money rather than getting stuck in and mucky. We have outlined the best investment opportunities in farming that can kick start your investment portfolio today.
The easiest way to invest in farming is through shares in an agriculturally based company. This offers you exposure to the farming industry without getting your hands dirty. Companies to consider are Wynnstay PLC, Farmacy PLC, and surprisingly the Co-Op who dabble their hands in supporting the farming industry. Typically, you would look to buy your shares low, and sell your shares high. Whilst investing in shares can be high risk, if you can weather any storms, you will reap the benefit of a peak in share prices.
Owning Land and Farm
Many investors are not afraid to get their hands dirty and like to physically see their investment. By owning a land and farm you are committing a lot of time and money to your investment. You must ensure your knowledge is up to scratch as running a farm requires a substantial amount of knowledge on how to properly take care of the land and farm. Farming your own land certainly is an interesting way increase your revenue, as long as external circumstances such as the weather plays in your favour.
Owning Land to Rent
A great alternative to farming is owning the land and renting to a farmer. A lot of farmland is rented and it’s a way of supporting the farming industry without getting your hands dirty. You would be able to fund the mortgage to your farmland by having the farmer pay you rent for using the land. Owning land outright to rent out is considered low-risk and stable being a long-term agreement between farmer and landlord. Owning land to rent out doesn’t necessarily mean you have to stick to the farming industry; you can expand your horizons and look to potentially operate an agriculturally based business from your own land in the future.
An ETF is an Exchange-traded fund. An ETF offers you a way to invest in a variety of commodities. For example, you may invest in a contract for crops that will sell in the future. Your ETF would be managed by a fund manager whilst your money is invested in a group of different commodities selected for your benefit by your fund manager. Agricultural commodities have really outperformed over the last year with the top selling crops being corn, soybean, and wheat. These commodities are essential to the food supply, therefore they’re highly volatile. They are susceptible to unexpected changes such as population, weather, and season. As an investor looking to be exposed to the agricultural industry, investing in ETF’s is a great way to expand your portfolio whilst dipping your toes in the industry.