Seed Capitalism for Rural Farming - Ag investments new markets?

13 Replies

Agricultural investments seem to require an enormous level of seed capital to make them flourish. I see that most of the farming industry has been dominated by a few select giant agribusiness companies. Are there any remaining bastions for the aspiring commercial farmer, or has this industry been locked out for the common investor?

It is a  difficult market to break in North America, where the agricultural industry is so mature. You will have significantly better results farming internationally in a country where the farming practices aren't as advanced. That way, you can outdo the competition without having to break the bank, purely by using advanced techniques. In that case, I think it is genuinely to make good capital by investing in seed (see what I did there?)

I firmly believe that blowing all your seed capital attempting to beat big farming in North America is going to be a losing cause. Pick a sector of REI that isn't quite so dominated, and I think you will find better success. Good Luck!

Look into international REI. Land is cheaper, labour is cheaper. You will find yourself owning and operating a full scale ag operation at much lower seed capital requirements.

I would estimate for the size of land you will need to do this profitably, you will need a couple million in seed capital at least. With how the modern day farmer struggles to stay competitive, I am not sure this is really a viable option anymore. 

@Hank Wu   well I dont think this site has a ton of farmers on it.. I have a passing knowledge of it.

In Oregon which is a big farming state.... it seems to go in waves of what is hot and what is not.

Timber of course is the ultimate in farming  Tree farming for passive.

Grapes are hot as the Napa Sonoma prime vintners have moved north and are snagging up all the little botiques in the area and money is being made simply because mature vineyards are not 500k to 750k an ACRE like they are in the Napa Valley yet a nice bottle of pinot will still sell for close to a nice bottle of median range napa cab.

Blueberries were hot we were involved in a planting of 60 acres of them.. and when i went to raise the capital the only real capital for this is farm credit.. they pretty much laughed us out of the room.

conversation went like this.

Him:  what do you do 

Me:  I loan money and build houses and have done a lot of timber

Him:  do you have a degree in ag

Me:   no barely made it through highschool

Him:  so no expeirnce farming  was your daddy a farmer

Me:   No daddy was a land developer and RE broker so no familial experiance

Him: we ONLY loan to those that are 2nd to 3rd generation farmers  with advanced degrees in AG.

Me:  well we own the land  

HIM:  we dont care you will fail most of the time

So I told my partner at the time you can buy me out and you can run with your blueberry dream.. the lender talked me out of it we are not experinced at it..  He went on to raise a few million privately and its been an abject failure for him. 

Now Hazel Nuts are hot.. every one wants Hazel nut farms...  when my then partner ( he bought me out 5 years ago.) was running hte numbers blueberries were 1.50 a lb wholesale   well he got his second harvest last year and got well under one dollar.. 

its a super high risk business... give me a stand of doug fir any day.. people need lumber to buy houses.. as long as your in Oregon or Washington you can harvest it.. and it just gets bigger ( increased volume every year as it grows) no need to do anything with it.. Timber is controlled by John Hancock  Harvard endowment fund as back end funders and then Warehouser has bought a lot of it.. but there is still a play for the small land owner in the north west.  In my mind every one of the HIGH WAGE earner younger guys 30ish should be buying a tract for their retirement.. I know it treated me well.

@Jay Hinrichs wise words! I remember a quote in the Capital Press (an Ag paper) "high prices and perennial agriculture eventually leads to heartache" blueberries were on fire for several years, everyone planted, now that they are all bearing the price is WAY down. Lucky they didn't lend to you!

This post has been removed.

This post has been removed.

This post has been removed.

This post has been removed.

Buy a piece of land that is easily secured, plant tons of trees that will hold their value. If you are in the right climate for it, Sandalwood is a sure bet. That is about as "Agricultural" as I would care to invest at this point in time. 

My brother in law owns 4 “quarters” (120acres) that are worth about $1mil each along with a couple million in equipment. He also “rents” 4 more quarters for $32k per year each. (Talk about a bad return for those landlords on a $million.)

So with 3 million invested he MIGHT have made money last year. He does 1/2 and 1/2 corn/soybeans. Unfortunately corn’s gone from $7/bushel to less than $3.

I spend 4-6 weeks 7 days a week in late September and early October cause I enjoy it. But my easy going salt of the earth friendly brother in law is a swearing screaming worried as hell guy the entire time. It’s kinda sad.

@Hank Wu Jay Hinrichs said it best. The best current farming is Tree Farming. Pick a species that is in high demand with growing interest, and in 15 years you will have a full retirement fund. Sandalwood anyone?

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here