Investing in farming can seem like a good strategic move. After all, whether the overall economy’s in a recession or booming, people still have to eat. Because of this, many investors regard agriculture and farming investments as being recession-proof. Further, as the world’s population increases, farming will play an increasingly important role in sustaining global societies.
That said, literally buying a farm isn’t a feasible strategy for the average investor. Buying a farm can require a large capital commitment and the time and costs of operating or leasing a farm are often substantial. Fortunately, investors have many other means to gain exposure to the sector beyond sinking money into a farm.
Investors also have access to an assortment of publicly-traded companies that operate in the farming sector. These companies range from those that directly grow and produce crops to those working in a variety of industries that support farmers.
One potential investment opportunity is in firms that plant, grow, and harvest crops. Many of these firms also engage in such supporting activities as distribution, processing, and packaging.
Exchange traded funds (ETFs) are a good tool for investors to gain diversified exposure to the agriculture sector.
More speculative investors may be intrigued by the idea of directly investing in commodities, hoping to take advantage of price changes in the marketplace. While you can gain exposure to commodities just by purchasing futures contracts.