Farmland’s Crucial Role in Food Security

This article was originally published February 8, 2019 and updated November 18, 2022.

In case you missed it, November 15, 2022 is being called the “Day of 8 Billion,” or the day the earth’s population officially reached 8 billion people. Some see this as a bittersweet milestone. On one hand, it represents previously unimaginable developments in human health and longevity. On the other, it’s worrying from the standpoint of food security and natural resources.

In the most recent State of Food Security and Nutrition in the World Report, released in July 2022, the United Nations issued a stark warning in reference to their Sustainable Development Goals:

“With eight years remaining to end hunger, food insecurity and all forms of malnutrition…the world is moving in the wrong direction.”

The critical question is: how are we going to feed ourselves? It all depends on productive land. In this article we review some of the key factors in the growing demand and draw a few conclusions about how farmland fits into humanity’s future.

Arable Land is Diminishing

Due to a variety of factors including development and mismanagement, the loss of farmland is a worldwide issue. In 2015, news outlets around the world reported on findings from the University of Sheffield that the planet had lost a third of its arable land in about 40 years.

The U.S. is no exception. American Farmland Trust reported in 2012 that the U.S. was losing around 3 acres of farmland every minute. While their latest report shows that that rate has slowed somewhat since, the general trend continues.

Source: FAO](https://www.fao.org), AcreTrader

Pandemic Aftershocks Contribute to Food Insecurity

The pandemic and resultant economic turmoil has not helped the situation. Currently, rising inflation—rising food prices—are causing global food insecurity to increase.

Source: FAO](https://www.fao.org), AcreTrader

According to the FAO, “Almost 3.1 billion people could not afford a healthy diet in 2020. This is 112 million more than in 2019, reflecting the inflation in consumer food prices stemming from the economic impacts of the COVID-19 pandemic and the measures put in place to contain it.”

The U.S. isn’t immune to this issue either. According to data from the U.S. Census Bureau, 17.5% of U.S. households were not highly food secure in 2021.

Source: U.S. Census Bureau, AcreTrader

Economic Development Boosts Food Demand

Rising food demand is partly due to population growth, but it’s also connected to expanding incomes and growing middle classes in lower income countries.

Source: World Bank, AcreTrader

It’s well-established that as incomes rise in emerging nations, so does demand for meat and grain. By 2050, global demand for more protein and higher quality food sources is expected to rise by over 130%.

Cereal crops, grains like corn, rice, wheat, and soybeans, comprise more than 50% of the global daily caloric intake on their own, representing one of the largest commodity markets in the world. But they’re also major feed grains for animal agriculture, and it takes a considerable amount of grain to produce one pound of meat. In the case of beef, it’s a 6-to-1 ratio.

“Even if total demand for food and feed may indeed grow more slowly, just satisfying the expected food and feed demand will require a substantial increase of global food production of 70 percent by 2050, involving an additional quantity of nearly 1 billion tonnes of cereals and 200 million tons of meat.” - FAO

The impact of increased demand for cereal crops has already been felt via long-term rising commodity prices, but global demand for these commodities and the land on which they are produced will become increasingly important to future food security.

Source: FAO, AcreTrader

The Role of Farmland

Where does this lead? A 70% increase in production will require farmers to produce more food than they have in the last 250 years combined.

Their capacity to do so depends upon productive land. Two of the most important keys to food security will be protecting arable land and innovating on the ground we have remaining.

One way to preserve farmland and propel a stable food supply is to invest in it. When you invest in farmland through AcreTrader, you invest in productive acreage in active agricultural operation.

In doing so, you partner with experienced farmers who are intentionally growing their businesses and seeking investment to do so. The more land that’s in production and being farmed responsibly, the greater the food supply, which can help keep consumer prices in check.

Global dynamics point to land’s long term value, and we are seeing this value in our farms’ recent performance. Five investment exits within the past year have generated returns that outperformed expectations.

We believe the future of agriculture looks bright. Take a look at our current offerings to see farms in active production that are available for investment.

The above content is not intended to be a comparison between products, but is intended for general, educational and informational purposes only. Any performance noted is historical and there is no guarantee any trends will continue. All investing involves risks, including the complete loss of principal. Diversification does not guarantee a profit or protect against loss in a declining market. It is important for each investor to review their investment objectives, risk tolerance, tax liability and liquidity needs before investing. Investment vehicles have differences in fee structure, risk factors and objectives. Investments are considered speculative, involve a high degree of risk and therefore are not suitable for all investors.

The information above is not intended as investment advice. Data in the charts above is sourced from the FAO, U.S. Census Bureau, and World Bank. Additional calculations and analysis performed by AcreTrader. Past performance is no guarantee of future results. For additional risk disclosures regarding farmland investing and the risks of investing on AcreTrader, please see individual farm offering pages as well as our terms and conditions. Clicking some links in this article will take you to websites independent of and unaffiliated with AcreTrader. The information and services provided on these independent sites are not reviewed, guaranteed, or endorsed by AcreTrader or its affiliates. Please keep in mind that these independent sites' terms and conditions, privacy and security policies, or other legal information may be different.