Why Bill Gates is buying up farmland... and you should too

Agricultural farm prices, food prices are at all time highs. We want to find you guys a way to make money so you don't have to spend it all on food. That's why today we're hanging out here. This is called Callahan's. This is a farm good store. And we're going to talk to them about what's going on with feed prices, what's happening with livestock. And we're going to also tell you how Bill Gates himself invests in this asset class. Usually if Billy does it, we probably want to invest in it. Grab your overalls. I just might buy a farm. You guys want to figure out why? Okay, let's see if I can not kill myself here. Oh, Samuel, that seems like a poor ide. That seems like a poor idea. Turns out over the past 10 years, Bill Gates, money manager, has been collecting farmland across more than 19 states. Farmland just like this.

As billionaires go with their money, Bill's pretty secretive. No one from his holding code called Cascade will speak to the media and get it. And he hasn't publicly stated why he owns the land. It's estimated that Bill owns about 242,000 acres of farmland and another 27,000 acres of other land. Land that doesn't farm, I guess, which.

Makes me sort of ponder why. What also intrigued me was the fact that these sort of commodities move in super cycles. There's an interesting cycle happening right now in farmland the likes of which we've kind of never seen before. Over the past 30 years, farmland has averaged about 11.5% in total return. Now that number spiked way up because look at what's happening in farm right now. This won't continue forever. There's wild volatility in farmland, but it looks like it's one of the most consistent outperforming asset classes. Why? More humans, more hungry humans and less land for people to farm on. How should we get over this? Probably has tetanus all over it. Okay. The things we do for YouTube. Did you guys know that nearly 30 million acres of US farmland are owned by foreigners? Now that's only about 2.5%, but that number has doubled and is growing. Now we were talking about this about a year and a half ago when we first posted this blog post. And today we're breaking down for you. How can you invest in farmland? Because you know, it's gone up in price a lot. These egg prices are up 300% week over week. These, this graph right here, is this a graph of, I don't know, stocks, NFTs no, no. This would be egg prices on a week over. So there's something fishy going on in farmland and we got to figure out how to financially take advantage of it so it doesn't take advantage of us. Do you guys know who one of the biggest buyers of farmland is? Pensions. In fact, look at all these pensions that have snapped up farmland left and right. I'm going to go talk to the farmers who couldn't be less similar to pensions about what's going on with farmland. Are they selling? Are they buying? What are we doing?

Welcome to the wild.

Okay. The second reason that I like farmland is volatility compared to other asset classes is actually pretty low. Historically, as of late, we've seen it go up. But imagine pairing a chart that looks like this with one that is pretty steady, like farmland. Get your bitcoin, get your barrels of hay, bushels of hay. Get your hay. Get you get it. The USDA and the UN estimate that demand for food is going to rise by anywhere from 70 to 100%. I like those trends over the next 30 years. Let's talk about taxes. Farming has amazing tax deductions, as you can see right here now. Varies wildly depending on where you're located. But most of farmland allows for grants, subsidies. That's why in Texas, for example, if you have six cows, you can have an agricultural tax credit. I think that would be interesting for people who are looking for returns. So if you are looking for a way to invest in farmland without actually having to buy it and farm, because I think that's a bad idea unless you know what you're doing. I like these options. Check them out. Now, you got to do your own due diligence on all of these, but I think it looks pretty interesting. Stop giggling. So one of the reasons that I like farmland investing today is look at what's happening in the world of food prices. The way that I think is interesting to play it is fractionalized investing in farms. Check out this farm together, for instance, where you can buy pieces of a farm. Not like investing in a publicly traded entity, because those things tend to go down when the stock market does overall, but in something like this. Another interesting way that I'm looking at potentially playing it, but who knows if this will work or not, is investing in things like equipment companies. Our good friend Warren Buffett has had a long standing position in companies like John Deere. Things that are ancillary to farming, tractors, equipment, hell, whatever this stuff is that holds together bales. All pretty interesting.

Check it out.

What would A farming video. Be without a stern face and a rake. I just feel like this should be in the video, so you're welcome.

This is my little friend. His name's Miguel. I reckon he's in the top 99th percentile of. Of photographed chickens.

This is scientific facts. I might get a job here just to do this. Like, free.

That's why I'm here.

Yeah. Really?

We heard about, like, chicken and egg prices going up like crazy.

Yeah.

Have little chick prices gone up like crazy?

Yes.

So, yeah, we were charging $6 a chick and oh, my gosh, last year we're charging $5 a chick. The year before, $4. The year before that, $2. So basically the price of corn and the price of chicken are pretty much hand in hand.

Yeah.

One to one correlation.

So feed has gone up about the same rate, which is like, wow.

I mean, that's in the last year in particular.

So I've heard the backyard chicken phenomenon is giant.

Well, it already was big in Austin because the city of Austin was incentivizing people with a $75 rebate if they took a class hosted by the city on how to raise backyard chickens.

What?

Yeah.

I didn't get that. Did you get one of those?

Yeah.

If you took the. If you take the class and you get the $75 off, it's like to go towards building your coop, basically. So it was already big, but then as soon as lockdown happened two years ago, we sold like 2,000 chickens that week. It was crazy. We sold so many birds. So, yeah, backyard chickens has only gotten bigger in the last two years. No doubt.

I'm really gonna have to stop, like, crowing so much over these sweet little angel babies. I literally can't right now.

Wild theories for you. You guys want to hear them? I think you want to hear them. I can't hear you. Maybe if you comment below. Subscribe and like, I'll hear them.

Okay.

One Impossible Meats takeover. Gates is the largest investor in Impossible Meats and has long since taken a stance that substituting meat would be beneficial for the environment. What if he buys a bunch of farmland, including soy and corn? What do cows eat again? Oh, yeah. And holds back up feed from farmers. Livestock prices go up, they become less viable as a feed option, and voila, faux meat takes off. That'd be a channel level 100 year plan play. I'm almost impressed if he's that forward looking. But needless to say, he profits in that instance and gets to, you know, get rid of America's cheeseburgers. Except I love those, so gates better watch out. 2. Making farming more environmentally friendly now this one isn't that crazy. Control the industry and you control the lines in the sand. What better way to control farm environmental regs than to be the largest farmer owner? After a late night convo with me and my hedge fund friend, I found out Bill is part of Leading Harvest. You can see it right here. They're the largest environmentally sustainable industry group in farming. This is why money is power. You get to play the long game. Why mess with lobbyists and regulators when you can just acquire all the assets and change the regulations yourself?

I don't know about you guys, but I think all of us have one of those Instagram friends that's posting every single day about what's happening with food supplies and shortages. Funny part is, I don't know, they get about 20% of it right? And if I look at some of the crazier conspiracy theories, I think that what's happening in Ukraine and Russia seems to be common sense is going to.

Ripple across the world.

And what is happening there, well, that's considered the breadbasket of the world, they call it. So most of our bread and grain for the world comes from areas like the Ukraine and Russia. Now they're not able to get out and actually produce any crops this year.

Why?

Well, they're busy killing each other. So really sad situation for them. Could actually become sad for the entire world too. Because countries that can't afford to purchase imports outside of their countries are going to have to now compete for a smaller amount of goods. Which means that we're going to have supply shortages. Because remember, the stuff that feeds humans also feeds animals.

My 32nd pro thesis on farmland as a sub investor in it is US farmland returns have averaged 11.5% annually since 1990. With consistently lower volatility and near zero correlation to stocks, volatility is wildly low. Imagine pairing farmland with bitcoin. You'd have a big asymmetric upside, meaning more opportunity to go up and maybe some damped volatility. Volatility on the downside. One chart stays stable, allows the other to ping pong around like a pogo stick on its hopefully hockey stick like curve. That's the technical way to think about it. This is a total side.

Now I don't even know if we should go.

I think we're gonna go there because it's YouTube and we got more time and I can just, you know, talk for a while. I do know a guy, a tree farmer, who was worth nine figures who owned a Ferrari?

A pet gator I got eye level.

With as it resides next to his bathtub. Yes, that's a true story. Piranhas and one million cactus that are now up for sale. So I suppose there's lots of different ways to make money farming. That one was pretty ridiculous for me. And the main question I have for you is are we normalizing buying land and moving to the countryside with our friends or what? So question everything, including me. Maybe billionaires.

Definitely question Bill Gates.

See you next time.

Let them lions roar until the elephants align Til all the.