Land is a natural resource that has diverse use. People buy land for farming, commercial use, or build their dream homes. Farmland prices have increased annually because of the increased demand for organic food. As people continue to become more conscious about what they eat, there is a reduction in the purchase of genetically modified foods. It has led to an increase in demand for farmland. It raises the question of who will buy farmland in the future.
Land value has increased at a high rate pushing the prices higher each year. Buyers range from farmers and investors to people who only want to build a family home or retirement homes. We have people buying and are unsure if the investment is worth it. They keep wondering whether they have made the right decision. Some will argue that people like Bill Gates are buying large acres of land. Why shouldn’t they? It is a limited resource that becomes scarce as more people purchase. We have others who would rather invest in stock than farmland. They would not understand why people continue to buy land at high prices. With a 29% increase in prices, people might not see the need to invest in farmland. Purchasing is only an initial investment, which you might need a bank loan to facilitate. People will wonder why they should spend more than the actual value of the land to own a piece of it.
The truth that most people are not aware of is that returns on farmland investment will continue to rise with the increased demand for food. I know you might be wondering why the rise in food demand, yet the world is currently producing enough supplies. It is a rise in demand for nutritious food rich in fiber, proteins, and vitamins. Human beings are shifting toward healthy living.
We still have a small group of people purchasing farmland, although the purchase rate has reduced due to an increase in the price of land. The question remains, who are the next generation of farmland buyers?
If I told you today that the young generation will lead future land purchases, would you agree? You will probably not agree with this. Furthermore, what do the centennials and generation z know about farming? It is a generation brought up in the digital era. Most of them cannot tell how to plant vegetables in their daily salad or which cows produce the milk in their coffee. They know the best place to get fresh vegetables in a supermarket. Technology advancements have made life easier because you do not need a physical visit. All you do is place an order in a shop with delivery services.
Why would this generation buy farmland?
After the second world war, there was an acute food shortage. The effects prompted scientists to produce high-yield crop varieties. All in a bid to ensure food is in surplus and the world will not suffer food shortages again. Unfortunately, the nutritional value of food produced has taken a downward spiral. There are high chances that the nutritional value of the lettuce in your salads might have very little nutritional value to you!
According to a US research study, food nutrients have been reduced by 38%. The research, conducted in 2004, gave insights into how high-yield crop production affects and continues to affect the nutritional value of different foods. We can only imagine the nutritional value of the food now, eight years later.
Over the years, we have had consistent food supplies with no shortage risks, but the quality has drastically reduced. People do not get the best value out of meals as nutritional content is compromised. Lifestyle diseases have increased with people suffering from diabetes, obesity, and hypertension at a young age. The centennials and generation z have lost family members and parents at an early age due to diet-related complications. The population is becoming more conscious of the food they eat. If you want to purchase organic farm produce, you will have to spend more.
Future farmland investors will be people trying to fix the nutritional problem of the food that is currently available for consumption. The investors will need land rich in minerals to plant crops for maximum output. To ensure the production of nutritious foods, they will not buy land easily simply because there is a piece of land available for disposal. They will require fertile land and will not believe this by word of mouth but by soil sampling for fertility checks and crop planning. Investors focused on healthy produce and sustainable farming practices play a role in maintaining the environment. They will employ healthy farming to promote healthy habits within the region and restore waterways that help mitigate floods.
Impact of technology and unpredictable weather on farmland purchases.
When we compare farming in the modern-day and earlier years, we can confirm significant growth. Unpredictable weather patterns have affected land produce. There has been an increased need for irrigation farming. Therefore, people buying land to fix the nutritional value issue will need to invest in technology. With the current land prices skyrocketing, the farmers buying these lands for food production and makeup 65% of people currently owning farmland might decide to slow down on purchases. The investors will have time to employ calculated efforts and plans to deliver on land produce. It is because they are doing this for the long haul. Profits in organic food production will continue to rise. If you are considering land purchases, farmland might be your best option. However, this does not entirely rule out real estate and commercial investment.
If you are new in the land business, you might need to research more on land purchases and also speak to experts who have been in the industry for a long time. They will give insights and challenge some decisions that will prompt you to re-evaluate your options backed by experts,
Therefore, before deciding on which land to invest in, it will be helpful to approach a company that has vast experience in land management and sale.
Advantage Realty & Land Management guides you through soil sampling, crop plans, and land fertility advice. If you are interested in farmland investment, let us know! We will support you from land purchase to planting advice and get the advantage!