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Western Producer – Is it Better to Own Farmland or Gold

Imagine it’s the year 2000 and there are two investors, with $1 million each. One investor buys $1 million worth of gold and the other purchases $1 million worth of Saskatchewan farmland. 2020, who is better off?

The simple answer is gold. In 2000, gold was valued at US$272 per ounce. On Aug. 4, gold hit US$2,000 an ounce for the first time in history. Ignoring inflation, gold is now 7.35 times more valuable than it was in 2000.Using the FCC historic farmland values report, published in 2018, the average increase in Saskatchewan land values from 2000 to 2018 was about 8.5 percent. Over a 20 year period, the initial investment of $1 million would be worth $5.1 million at the beginning of 2020. So, the land is 5.1 times more valuable than it was in 2020. Gold seems like a better investment, but farmland has one huge advantage — an income stream.