We have been highlighting the virtues of investing in good quality agricultural land in many of the recent posts; explaining our thesis that farmland is a solid long-term investment idea that exhibits strong supply/demand support for future appreciation. This has been illustrated through many different examples of historical land price trends as well as the recent positive performance of “good” Midwest farmland, in spite of huge retractions in the equity markets over the past year.

With that said, it is our contention that there will be a massive shift of individual investors moving away from the typical equity & bond markets that have hammered away at individual wealth not only in this country, but all over the world.

In our opinion, this coming year has very little to offer in the way of good places to put money and who knows how the market is going to react when the details of the new “spending” bill are finally hammered out. Investors are reeling and the white flags are ready to come out!

Moving forward in 2009 and 2010 we see three major themes developing:

·         Inflation will not only be a buzzword to be debated with the “deflation defenders”, but it will be real and it will be high

·         The dollar will rollover and it will roll hard

·         Markets will remain subdued, volatility will remain high and 7,000 may be something to aspire too

So where can you invest in this environment and actually realize a solid return on capital? You guessed it; an agricultural based asset that has a proven track record of performance in challenging economic times, otherwise known as farmland.

Despite what many may believe, this resource is not endless and its importance is only growing as the world’s demand for quality food resources continues to grow. Farmland is at the heart of this countries production power and we believe a return to this “producer of goods” type of economy will make agriculture the place to be, not only near term but for many years to come.

-GDH