Investing in agriculture entails putting money into producing, processing, and distributing food and crops.
FREMONT, CA: Investors interested in agriculture have many options other than purchasing a farm. There are several ways to invest in agriculture indirectly, ranging from farm REITs to agricultural ETFs to commodities markets.
Agricultural REITs
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
Investing in any farming-focused real estate investment trust is the closest an investor can get to owning a farm without actually owning one (REIT).
These REITs usually buy farmland and lease it to farmers. As a result, farmland REITs provide numerous advantages. They offer far more diversification than purchasing a single farm because they allow an investor to have interests in multiple farms spread across a large geographic area.
Agriculture Stocks
Investors can access a diverse range of publicly-traded agricultural companies. These businesses range from those that grow and produce crops directly to those that work in various industries that support farmers.
Crop Production
Firms that plant, grow, and harvest crops are one potential investment opportunity. Many of these businesses also provide support services such as distribution, processing, and packaging.
Supporting Industries
Investors can also purchase stock in a variety of agricultural-related industries. For example, companies that sell fertilizer and seeds, farm equipment manufacturers, and crop distributors and processors are three of the largest enterprises.
Ag ETFs
Ag ETFs Exchange-traded funds (ETFs) are a good way for investors to gain diversification in the agriculture sector.
Investors should carefully consider each ETF's management fees and the index's performance that the fund tracks when investing in an ETF.
Agriculture Mutual Funds
When investing in mutual funds, investors should compare fees and past performance to ETFs.