Spotlight #4 Artem Milinchuck: Farmland Investing Now Available to All Accredited Investors - The Future of Investing

Episode Summary

Executive Summary: Eric Townsend and Farm Together CEO Artem Millenchuk make the case for farmland as a scarce, income-producing real asset with strong inflation protection, low correlations to stocks/bonds, and generational tailwinds from rising global food demand and a shift in farm ownership. The episode also explains Farm Together’s fractional investing model that opens farmland to accredited and international investors.

Main Topics: Why farmland is gaining investor attention (Priority: 5/5): Millenchuk links farmland demand to decades of money printing, falling interest rates, and the broader migration of capital into alternative assets as bonds no longer provide meaningful yield. Farmland’s return profile and portfolio role (Priority: 5/5): The discussion frames farmland as a hybrid asset: current income plus price appreciation, fitting between bonds and stocks rather than replacing either one. Inflation hedging and real-asset characteristics (Priority: 5/5): Farmland is presented as a strong inflation hedge with research showing high correlation to CPI/PPI, and as a physical asset tied to food production and rental income. Types of farmland and risk/return differences (Priority: 4/5): The speakers distinguish pastureland, raw crops, and permanent crops, noting differing drivers, volatility, and return potential across each segment. COVID-19 impacts and post-pandemic trends (Priority: 4/5): Farmland proved resilient during the 2020 shock, with some logistics and crop-specific dislocations, while long-term demand may be strengthened by health, safety, and supply-chain concerns. Farm Together’s fractional ownership platform (Priority: 5/5): Millenchuk explains how Farm Together sources farmland, structures fractional deals, manages operators, and allows accredited and international investors to access a once-inaccessible asset class. Diversification and correlation benefits (Priority: 5/5): The interview emphasizes farmland’s low or negative correlations with traditional assets, making it a diversification tool for sophisticated portfolios.

Key Arguments: Farmland benefited from the same macro forces pushing investors into alternatives: low rates, money printing, and compressed bond yields. Farmland is scarce and becoming more available as an asset because the average farm owner is older and many heirs do not want to farm. Long-term historical performance has been attractive, with farmland producing strong total returns while remaining largely uncorrelated to equities and bonds. Farmland can serve as both an income asset and an appreciation asset, offering a blend of fixed-income-like cash flow and equity-like upside. Farmland is a natural inflation hedge because farm outputs feed directly into the CPI and PPI baskets. Diversifying across crop types, geographies, and water districts matters because farmland is not a single uniform asset. COVID-19 showed farmland’s resilience, though certain crop markets experienced temporary disruptions from logistics and supply/demand imbalances. Fractional platforms like Farm Together democratize access to farmland for accredited investors with smaller checks than direct farm ownership requires.

Data Points: Alternative investment market size: About $3 trillion in 2008, approaching $8-9 trillion now, projected to reach $13 trillion in 2024 - Used to show the broader shift toward alternatives US farmland turnover: About 70% expected to change hands in the next 20 years - Cited as a major supply shift making farmland available to outside investors Farmland long-term return: About 12% annually from 1970 to 2018 - Presented as historical performance that outperformed several major asset classes Raw crop current income: About 3% to 5% per year - Income from corn, soybeans, and wheat farmland Raw crop total return target: About 7% to 9% - Estimated stable return profile for raw crops Permanent crop returns: About 10% to 15%, with some cases 15% to 20%+ - Higher-return, higher-volatility segment of farmland Farmland-correlation to stocks: 12% - Correlation from 1992 to Q1 2020 Farmland-correlation to real estate: 20% - Shows lower-than-expected linkage with conventional real estate Farmland-correlation to bonds: -11% - Indicates negative correlation to bonds over the cited period Farmland-correlation to gold: Almost zero - Used to position farmland as distinct from precious metals CPI correlation: 70% - From farmland research cited in the interview PPI correlation: Almost 80% - Supports inflation-hedging claim Portfolio improvement example: Sharpe ratio from 0.76 to 0.95 - Illustrative benefit of adding 15% farmland to a stock/bond portfolio Portfolio return quality metric: 8.15% to 8.61% - Another portfolio statistic cited for the 15% farmland allocation example COVID Q1 2020 farmland return: About -0.5% - Shows relative resilience during the initial shock 2007-2009 farmland index performance: Up almost 20% - Compared against stocks falling 30% to 50% during the financial crisis Minimum investment: Typically $10,000 to $20,000 - Fractional check size on Farm Together deals Typical investor portfolio size example: $50,000 to $100,000 can be spread across 5 to 10 properties - Illustrates diversification at the platform level Farm deal size: One to ten million dollars sweet spot - Direct institutional-scale farm ownership benchmark Fund holding period: 8 to 10 years - Typical investment horizon for Farm Together deals Target net returns: 9% to 12% - Expected net returns after fees Target cash yields: 4% to 6% net - Expected annual cash distributions to investors

Pivotal Quotes: "Farmland is just following a much broader trend of alternative investments opening up." — Artem Millenchuk: Explaining why farmland has attracted capital in a low-yield world "Farmland has a 70% correlation to the CPI consumer price index and almost 80% correlation with the producer price index." — Artem Millenchuk: Making the inflation-hedging case for farmland "It’s very common practice to rent farmland." — Artem Millenchuk: Describing farmland as a real-estate-like rental asset with income characteristics

Implications: Farmland is presented as a durable portfolio diversifier with inflation protection and accessible entry points through fractional ownership. The model may expand as more investors seek real assets, income, and exposure to food/agriculture trends.