Overview of At The Money: Farmland Investing (Bloomberg)
In this episode of At The Money, Barry Ritholtz explores farmland as an alternative investment with Brandon Zick, chief investment officer of the Saris Farmland Fund, which manages roughly $2 billion in agricultural assets. The conversation makes the case that farmland can function as a long-term portfolio diversifier because it produces steady income, tends to rise with inflation, and can appreciate over time. The episode also covers how farmland is sourced, why the Great Lakes region is especially attractive, and what risks investors should watch, including weather, water access, regulation, and development pressure.
Why Farmland Appeals to Investors
Farmland stands out from many other real estate assets because it combines several sources of return:
- Regular income from rent paid by farmers
- Capital appreciation as land values rise over time
- Inflation protection, since crop prices and land values often move with broader price levels
- Low correlation with traditional stocks and bonds, making it a portfolio diversifier
Zick emphasized that farmland is not a depreciation play like some other real assets. Instead, it is a productive asset that can generate returns both from ongoing operations and from long-term value growth.
How Farmland Investments Work
A key part of the discussion focused on how farmland is acquired and managed:
- Farms are purchased through public auctions and, more commonly, private off-market transactions
- There is no true “Zillow for agriculture” yet, so sourcing depends heavily on tenant and farmer networks
- Institutional owners typically do not operate the farms themselves
- Instead, they lease land to active family farmers who do the actual growing
The fund’s strategy relies on relationships with farmers, many of whom rent large portions of the land they farm from non-farming owners such as estates, trusts, and heirs.
Regions and Markets the Fund Likes
Zick said the fund is U.S.-only and has a strong concentration in the Great Lakes region, especially:
- Indiana
- Michigan
- Illinois
- Wisconsin
- Ohio
- Kentucky
- Western New York
Why the Great Lakes region?
The region is attractive because it offers:
- Strong, high-quality soils
- Reliable water access and rainfall
- Competitive farm rental markets
- Proximity to major population centers and distribution routes
The team sees the region as relatively well-positioned for future climate shifts because it is less exposed to severe water stress than many other agricultural areas.
Additional Value Beyond Crops
The episode highlighted that farmland can produce more than just crop rent. Owners may also benefit from:
- Timber harvesting
- Hunting leases
- Oil, gas, and mineral rights
- Wind turbine leases
- Solar leases
- Conservation, fiber, or power easements
- Sale or redevelopment for manufacturing or data centers
Solar and data centers
These were presented as especially meaningful upside opportunities:
- Solar leases can produce several times the income of traditional farm rent
- Data center development can drive land values to multiples of farmland value when a site has power, water, fiber, and favorable zoning
Main Risks and Challenges
The conversation also covered the major risks in farmland investing:
Weather and climate
- Droughts, floods, and drainage issues remain core agricultural risks
- Investors can reduce exposure by favoring areas with natural rainfall and strong soils
- Water availability is likely to become an even bigger issue over time
Regulation and development pressure
- Agriculture faces pressure from:
- water regulation
- labor costs
- input costs
- encroaching development
- Zick said California is generally less attractive for the fund because of water restrictions, labor rules, and regulatory complexity
Crop-cycle volatility
- Commodity prices can swing, but multi-year leases help smooth income
- Farmland income can reduce volatility even when crop prices fall
Views on California and Vineyards
California was discussed as a strong food-producing region but not necessarily an ideal institutional farmland market.
- It is excellent for specialty crops and local produce
- However, water constraints and regulation make many row-crop investments less appealing
- Zick is also skeptical about vineyards as an investment category because:
- wine consumption has declined
- labor is expensive
- margins can be difficult unless you own a high-end branded operation
Key Takeaways
- Farmland can be a compelling real asset for long-term investors
- It offers a mix of income, appreciation, and inflation protection
- The most attractive opportunities may come from midwestern and Great Lakes farmland
- Land can gain value from non-farming uses like solar, data centers, timber, and easements
- Risks center on water, weather, regulation, and competition for land
- Institutional ownership is still relatively small, suggesting room for more capital to enter the space
Bottom Line
The episode frames farmland as a durable, under-owned alternative asset that may appeal to investors seeking long-term, non-correlated returns. Its value comes not just from farming income, but from the land’s flexibility and optionality over decades.