Farmland Investing: A Stable Alternative to Volatile Tech Stocks

by Scott Oaks – Managing Member, Harvest Capital

Recently I heard the surprising news that Roomba (robotic vacuum) declared bankruptcy protection.  What a wonderful invention – always willing to do its job with no complaining or drama, with only a one-time payment required.  This stock opened in 2005 at $24/share, rose to a high of $197 in early 2021, then a few months ago it was delisted, and stockholders were warned of total losses by the end of 2025.  This announcement caused me to reflect on the merits of investing in farmland (I am admittedly biased toward farmland investing, with many generations reminding me of the advantages of building wealth by owning land.  Bedtime stories were often modified to include statements like: The 3 bears didn’t have to fear Goldilocks because they owned their house & land.  Goldi needed to start saving for her own place…)

When I quired AI as to how many tech stocks are still trading after 10 years, I received this answer:

Data on businesses in general suggests that only about one-third (35%) of new businesses are still operating after 10 years. This general trend of creative destruction and market churn applies strongly to the tech sector. 

My argument is that buying farmland IS making a (relatively safe) investment in Tech.  More and more, the companies that support farm profitability are utilizing all relevant technologies.  From the development of better performing seed & chemicals, to time release nitrogen that boosts yields and is less likely to pollute drinking water, to machinery that uses precision technology to place seed, fertilizer, and other soil amendments exactly where it will be most beneficial.  To those that prefer organic, the spread between “conventional” ag and organic is getting much smaller.  In the past, the same quantity of herbicides and pesticides were spread over every square foot of the land.  Now it is possible to use robotic weed identification to only spray where there is a noxious weed.  This technology reduces chemical use by 85% to 95%.

If you are interested in long term growth with very limited downside, it is hard to beat investments in farmland.  If you are intrigued with the monetization of new technologies in real world business applications but would also like to avoid the painful reality that high flying tech stocks today may be worthless in a few years, farmland is a good choice.  View the following chart: