By Leo Almazora
October 21, 2021
Excerpt from article:
As the pandemic crisis raged across the world over the past year and a half, governments and central banks in developed countries have shown an extreme willingness to keep their economies with unprecedent levels of fiscal and monetary stimulus – and it’s making a lot of investors nervous.
Some predicted that would lead to persistent inflation which will give way to downturns in the markets; if the past five months of above-target CPI readings in Canada are any indication, that scenario may already be unfolding. Against this backdrop, many institutions and well-heeled investors are starting to seek more exposure to alternative investments, which includes farmland.
“It’s human nature,” said Stephen Johnston, director and co-founder of Veripath Farmland Partners, which manages funds that invest in Canadian row-crop farmland. “If everything you own is doing well, you don’t tend to care about lack of correlation. But since the pandemic struck, we’ve seen investor interest rise to a level I haven’t seen before in my 14 years of farmland investing.”
According to Johnston, farmland is not correlated to stocks and bonds in any material way. During the 2001 crisis, farmland as an asset rose by 6%; in 2008, it increased 13%. And in the recent COVID-19 crisis in the markets, it once again appreciated as the North American equity and fixed-income markets tumbled.
Original article here