Farmland: The Only Place Real Estate Is Booming (JJG, DBA, MOO, CORN, DBC)

Sara Nunnally: Farm life for me isn’t the same as farm life for actual farmers. I’m working on a small garden… But for me, it’s about having all my animals together — dogs, horses, cats — on a peaceful plot of land here in the Midwest.

For true farmers — like the guys who work the cornfields surrounding our property — it’s a different story. It’s awfully hard work, with hours sometimes into the dark of night. For investors, the story is one of new riches.

One company sold $450 million in farm real estate, equaling 750 farm and ranch units. Sales are up 17% over last year, and prices are up 20%… sometimes more in some places. So let’s take a look back to August 2011, on how we saw the only place real estate was booming…

I spent last night with a couple of friends who moved into a farm about a mile from us. They’ve got 10 acres, two horses, 18 chickens, three geese, four ducks, six cats and four dogs…

In other words, we’re right at home in their house.

But what I want to talk to you about is my friend Jenny’s basement. As her husband Andy was making dinner, she showed us her canning shelves. Rows of Queen Anne’s Lace jelly, and pickled kohlrabi, cucumbers, green beans, beets and onions, and tomatoes lined the small fieldstone room.

The musty smell of a 100-year-old basement was strong, a can’t-miss reminder of how folks used to do things before there was refrigeration.

We sampled some of the pickled veggies — and they were fantastic! My favorites were the pickled green beans and the pickled tomatoes.

This is a skill that a lot of folks have forgotten… but it’s an important lesson in preparing for the future.

Too often we waste what we have when times are good.

I’m not saying this from a moral perspective. It just makes sense that if you’ve got a bountiful garden that you preserve some of that for when times aren’t so good.

That’s because you never know what the future will hold.

Take, for example, the Wisconsin State Fair. It’s an idyllic setting with cows and pigs dressed in their best bows. The 4-H kids compete against each other for the best rabbit, and you can get nearly anything fried on a stick…

But this year, on Aug. 5, gangs of men attacked innocent bystanders on the fairgrounds, and even followed people out into the parking lot and into the surrounding neighborhoods.

This “flash mob” took fairgoers completely by surprise, and the accounts of some of the beatings are horrific.

But this violence isn’t completely random. If you’ve been watching the news, you know what I mean.

The fairground flash mob was the fourth act in a string of attacks. Flash mobs have struck in Philadelphia, Cleveland and Chicago…

Being prepared for upheaval is an important step in securing your future. Not only does this apply to your physical health and well-being, but your financial future can benefit from prudent planning.

Let’s take this “flash mob” scenario to the extreme… What if suddenly we had riots like London and other U.K. cities have seen? It’s not unheard of that these urban uprisings can get out of control and disrupt much-needed services, like banks and transportation.

Do you have extra cash stashed somewhere to be able to buy some necessities like groceries or gasoline?

That’s one of the reasons why I’m so interested in learning how to can. I’m heading over to Jenny’s house this afternoon to help her can some more veggies. In the next few days, I’ll be preparing part of our land for a fall/winter garden. We’ll be growing things like broccoli, carrots, onions and cabbage. These can help supplement what we buy from the store.

We’re even considering goats to help keep the lawn down and for milk and cheese.

Let me be honest with you. Over the past couple months, the turmoil in the financial markets and the violence in major cities put me on edge. I’ve been asking myself… How can I secure reliable power? What do I need to do to create my own food supply? What measures do I take to keep my family safe?

There’s a 36.5-acre plot of mixed land to the southwest of our farm that we’re seriously considering snatching up by any means possible.

Right now, land might be one of the best defenses you can buy. You can grow food, put up some wind turbines or solar panels, or even rent it out to farmers who will pay you for the privilege of growing corn or hay or soybeans.

Two years ago, as the U.S. was starting to emerge from the global financial crisis, Wisconsin farmland prices averaged 79% higher than the national average… $3,750 versus $2,100. Pasture land rentals were triple the national average.

In fact, farm real estate values climbed 8% in 2011 versus 2010 in Wisconsin. But that’s not even the highest climb over the past year. North Dakota values jumped 15.3% and Nebraska soared 17.1%.

Check this out, from the USDA:

Real Estate Map
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This is the kind of real estate we should be investing in…

Look at the concentration of high value growth across the Midwest. This highlights another way you can take advantage of land values — crops. Things like corn and other agricultural grains. Land values are rising because of demand for these grains, and their ever-increasing price.

Here’s how wheat, corn and soybeans have performed over the past year.

Wheat Chart
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All three are up. Soybeans are up 30%, wheat is up 59%, and corn (NYSEARCA:CORN) is up only slightly after a big pullback in June.

Agricultural ETFs like the PowerShares DB Agriculture ETF (NYSEARCA:DBA) and the iPath DJ-UBS Grains ETN (NYSEARCA:JJG) give you great access to these commodities. If you can’t get your hands on 36+ acres of mixed land with a lovely creek running through it, these financial investments might be the next best thing.

Written By Sara Nunnally For The Taipan Publishing Group

As Senior Research Director, global correspondent and co-editor of Smart Investing Daily, Sara has traveled all over the world in search of the best investment   opportunities to recommend to her readers, be they in developed economies like France and Italy, in emerging markets like the Czech Republic and Poland, or in frontier terrain like Vietnam and Morocco.  Her unique “holistic” approach of boots-on-the-ground research has  given her an edge in today’s financial marketplace as she searches for  the  next investment opportunities in hot sectors like alternative energy, currency markets and commodities.  Sara Nunnally’s diverse background includes studies in history, computer science, literature and financial research. She has appeared on news media such as Forbes on Fox, Fox News Live, Bloomberg and CNBC’s Squawk Box, as well as numerous radio shows around the country.

Article brought to you by Taipan Publishing Group, www.taipanpublishinggroup.com.

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