“As the pandemic crisis raged across the world over the past year and a half, governments and central banks in developed countries have shown an extreme willingness to keep their economies with unprecedent levels of fiscal and monetary stimulus – and it’s making a lot of investors nervous.
Some predicted that would lead to persistent inflation which will give way to downturns in the markets; if the past five months of above-target CPI readings in Canada are any indication, that scenario may already be unfolding. Against this backdrop, many institutions and well-heeled investors are starting to seek more exposure to alternative investments, which includes farmland.
“It’s human nature,” said Stephen Johnston, director and co-founder of Veripath Farmland Partners, which manages funds that invest in Canadian row-crop farmland. “If everything you own is doing well, you don’t tend to care about lack of correlation. But since the pandemic struck, we’ve seen investor interest rise to a level I haven’t seen before in my 14 years of farmland investing.”