You don’t need to be a Harvard dropout or the mastermind behind a tech empire to take a page from Bill Gates’ playbook. While he might steer clear of trendy investments like cryptocurrency and NFTs, Gates is putting his money into something far more down-to-earth—literally. The billionaire is becoming one of the largest private owners of farmland in the United States. But why?
Bill Gates, co-founder of Microsoft and one of the wealthiest people on the planet with a net worth of $125 billion, has been quietly buying up farmland for years. This move might seem surprising, given that farming isn’t typically associated with the mega-rich. The average American farm is about 444 acres, and family farms often make a modest annual profit of around $69,000. So, what’s Gates’ angle?
Despite the challenges in agriculture—like tariff wars, climate change, and fluctuating consumer demand—Gates sees opportunity. With the U.S. government subsidizing nearly 40% of farmer income, farming remains a viable, if unpredictable, venture. Plus, farmland is a finite resource. As the amount of arable land shrinks, the value of existing farmland is on the rise, making it an attractive asset for those looking to hedge against economic uncertainty.
Gates isn’t new to this game. Through his investment firm, Cascade Investment LLC, he’s been diversifying into farmland since the 1990s. Under the guidance of Michael Larson, a former bond fund manager, Gates has steadily increased his holdings, now owning more farmland than anyone else in the U.S.
But why farmland? For one, it offers diversification away from the volatility of the stock market. It’s also a smart inflation hedge—farmland has a strong correlation with inflation metrics like the Consumer Price Index (CPI) and the Producer Price Index (PPI). As food prices go up, so does the value of the land that produces it.
Gates might also be eyeing the future of agriculture. With advancements in Agri-Tech, such as seed technology and sustainable farming practices, there’s potential for significant returns. His investments could be paving the way for innovations that will shape the future of farming.
However, not everyone is thrilled about Gates’ growing influence in agriculture. Some are skeptical of his intentions, particularly given his interest in plant-based proteins. Will Harris, a sixth-generation farmer in Georgia, argues that Gates doesn’t fully understand the role of animal agriculture in sustainable farming.
If you’re not the fourth richest person in the world but still want to get in on the farmland boom, there are options. You can either buy a farm, which is no small feat, or invest in publicly traded Real Estate Investment Trusts (REITs) like Farmland Partners (NYSE: FPI) and Gladstone Land Corporation (NASDAQ: LAND).
Farmland offers a unique investment opportunity with low volatility, steady income, and proven long-term appreciation. It’s an asset class that has performed remarkably well over the years, often outpacing other investments. So, while you might not have Gates’ billions, you can still cultivate your own slice of this growing market.
