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

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00:00agricultural farm prices food prices are at all-time highs we want to find you

00:05guys a way to make money so you don't have to spend it all on food that's why

00:09today we're hanging out here this is called Callahan's this is a farm good

00:13store and we're gonna talk to them about what's going on with feed prices what's

00:17happening with livestock we're gonna also tell you how Bill Gates himself

00:21and that's in this asset class usually if Billy does it we probably want to

00:26invest in it grab your overalls I just might buy a farm you guys want to figure

00:30out why okay let's see if I can not kill myself here oh Samuel that seems like a

00:35poor right that seems like a poor idea turns out over the past 10 years Bill

00:41Gates money manager has been collecting farmland across more than 19 states

00:46farmland just like this as billionaires go with their money bills pretty secret no

00:52one from his holding code called cascade will speak to the media and get it and

00:57he hasn't publicly stated why he owns the land it's estimated that Bill owns

01:01about 242,000 acres of farmland and another 27,000 acres of other land that

01:08doesn't farm I guess which makes me sort of ponder why what also intrigued me was

01:13the fact that these sort of commodities move in super cycles there's an

01:18interesting cycle happening right now in farmland for the likes of which we've

01:21kind of never seen before over the past 30 years farmland has averaged about 11.5

01:26percent in total return now that number spiked way up because look at what's

01:31happening in farmland right now this won't continue forever there's wild

01:35volatility in farmland but it looks like it's one of the most consistent

01:38outperforming asset classes why more humans more hungry humans and less land for

01:44people to farm on how should we get over this probably has tetanus all over it

01:49it okay the things we do for you too

01:54did you guys know that nearly 30 million acres of US farmland are owned by foreigners now

02:05that's only about 2.5 percent but that number has doubled and is growing now

02:09we were talking about this about a year and a half ago when we first posted this

02:13blog posts and today we're breaking down for you how can you invest in farmland

02:17because you know what's gone up in price a lot these egg prices are up 300% week

02:25over the week these this graph right here is this a graph of I don't know stocks

02:31NFTs no no this would be egg prices on a week-over-week basis so there's

02:36something fishy going on in farmland and we got to figure out how to

02:38financially take advantage of it so it doesn't take advantage of us do you guys

02:44know who one of the biggest buyers of farmland is pensions in fact look at all

02:50these pensions that have snapped up farmland left and right I'm gonna go

02:54talk to the farmers who couldn't be less similar to pensions about what's

02:58going on with farmland are they selling are they buying what are we doing

03:08okay the second reason that I like farmland is volatility compared to other

03:14asset classes is actually pretty low historically as of late we've seen it

03:18go up but imagine pairing a chart that looks like this with one that is pretty

03:22steady like farmland get your Bitcoin get your barrels of hay bushels of hay

03:28get your hay get you get it the USDA and the UN estimate that demand for food is

03:33going to rise by anywhere from 70 to a hundred percent I like those trends over

03:38the next 30 years let's talk about taxes farming has amazing tax deductions as

03:43you can see right here now varies wildly depending on where you're located but

03:47most of farmland allows for grants subsidies that's why in Texas for

03:52example if you have six cows you can have an agricultural tax credit I think

03:57that would be interesting for people who are looking for returns so if you were

04:02looking for a way to invest in farmland without actually having to buy it and

04:05farm because I think that's a bad idea unless you know what you're doing I like

04:08these options check them out now you got to do your own due diligence on all of

04:12these but I think it looks pretty interesting

04:22stop giggling so one of the reasons that I like farmland investing today is look at

04:28what's happening in the world of food prices the way that I think is interesting to

04:33play it is fractionalized investing in farms check out this farm together for

04:37instance where you can buy pieces of a farm not like investing in a publicly

04:41traded entity because those things tend to go down when the stock market does

04:45overall but in something like this another interesting way that I'm looking

04:49at potentially playing it but who knows if this will work or not is

04:52investing in things like equipment companies our good friend Warren Buffett has

04:55had a long-standing position in companies like John Deere things that are

04:59ancillary to farming tractors equipment hell whatever this stuff is that holds

05:05together bales all pretty interesting

05:07what would a farming video be without a stern face in the rake I just like this

05:21should be in the video so you're welcome this is my little friend his name's

05:26Miguel I reckon he's in the top 99 percentile of photograph chickens this is

05:31scientific facts I might get a job here just to do this like free we heard about

05:39like chicken and egg prices going up like crazy yeah have little chick prices

05:44gone up like crazy yes so yeah they we were charging six dollars a check and oh my

05:48gosh last year we're charging five dollars a chick the year before four

05:51dollars the year before that two dollars so basically the price of corn and the

05:55price of chicken are pretty much hand in hand yeah one-to-one correlation so feed

06:00has gone up about the same rate which is like wow I mean that's in the last year

06:05in particular so I've heard the backyard chicken phenomenon is giant well it's

06:10already was big in Austin because the city of Austin was incentivizing people with a

06:13$75 rebate if they took a class hosted by the city on how to raise backyard

06:17chickens what yeah I didn't get that yeah right yeah if you took the if you

06:22take the class and you get the $75 off it's like to go towards building your

06:25coop basically um so it was already big but then as soon as lockdown happened two

06:29years ago we sold like 2,000 chickens that week it was crazy we sold so many

06:35birds so yeah backyard chickens has only gotten bigger in the last two years no

06:39doubt I'm really gonna have to stop like crowing so much over these sweet

06:43little angel babies I literally can't right now wild theories for you guys

06:51want to hear them I think you want to hear them I can't hear you maybe if you

06:54comment below subscribe and like oh yeah okay one impossible meats take over

06:58gates is the largest investor in impossible meats and has long since taken a

07:02stance that substituting meat would be beneficial for the environment what if

07:05he buys a bunch of farmland including soy and corn what do cows eat again oh yeah and

07:11holds back up feed from farmers livestock prices go up they become less viable as

07:18a feed option and voila faux meat takes off that'd be a China level 100 year plan

07:24play I'm almost impressed if he's that forward-looking but needless to say he

07:29profits in that instance and gets to you know get rid of America's cheese

07:33brother burgers except I love those so gates better watch out to making farming

07:38more environmentally friendly now this one isn't that crazy control the industry

07:41and you control the lines of the sand what better way to control farm

07:45environmental regs than to be the largest farm owner after a late-night

07:50combo with me and my hedge fund friend I found out bill is part of leading

07:52harvest you can see it right here they're the largest environmentally

07:56sustainable industry group in farming hmm this is why money is power you get to

08:02play the long game why mess with lobbyists and regulators when you can just

08:06acquire all the assets and change the regulations yourself I don't know about

08:09you guys but I think all of us have one of those Instagram friends that's

08:12posting every single day about what's happening with food supplies and

08:14shortages funny part is I don't know they get about 20% of it right and if I

08:19look at some of the crazier conspiracy theories I think that what's happening in

08:23Ukraine and Russia seems to be common sense is going to rip off the world and what

08:28is happening there well that's considered the bread basket of the world they call it so

08:32most of our bread and grain for the world comes from areas like the Ukraine and

08:38Russia now they're not able to get out and actually produce any crops this year

08:41why well they're busy killing each other it's a really sad situation for them

08:46could actually become sad for the entire world too because countries that can't

08:50afford to purchase imports outside of their countries are going to have to now

08:55have compete for a smaller amount of goods which means that we're going to have

09:00supply shortages because remember the stuff that feeds humans also feeds animals

09:11my 32nd pro thesis on farmland as a sub investor in it is US farmland returns

09:18have averaged 11.5% annually since 1990 with consistently lower volatility and near

09:25zero correlation to stocks volatility is wildly low imagine pairing farmland with

09:30Bitcoin you'd have a big asymmetric upside meaning more opportunity to go up and

09:35maybe some damn volatility on the downside one chart stays stable allows the

09:40other to ping-pong around like a pogo stick on its hopefully hockey stick like

09:44curve that's the technical way to think about it this is a total side now I don't

09:49even if we should go I think we're gonna go there this is YouTube and we got more

09:51time and I can just you know talk for a while I do know a guy a tree farmer who

09:56was worth nine figures who owned a Ferrari a pet gator I got I level with as

10:01it resides next to his bathtub yes that's a true story piranhas and 1 million

10:05cactus that are now up for sale so I suppose there's lots of different ways to

10:10make money farming that one was pretty ridiculous for me and the main question I

10:14have for you is are we normalizing buying land and move into the countryside with

10:19our friends or what so question everything including me maybe

10:23billionaires definitely question Bill Gates see you next time

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