A long-term investment thesis to own or lease a portfolio of California farmland allows prudent investors to earn above market short-term rates of return from farming operations and excellent long-term returns from leasehold rights. Land control through leases containing strong water rights ensures a long-term hedge against inflation, a hedge against climate change leading to food supply disruptions from overseas, and a hedge against drought causing tightening water supplies for California’s growing population.
Olives for Extra Virgin Olive Oil (EVOO) is financially attractive as a target crop. They thrive on poor soils and use significantly less water than grapes, citrus or nut trees. Despite rapid industry growth, California still produces only 5% of US EVOO consumption, requiring the US to import 95% of its domestic needs. California’s oil quality surpasses most imports, demonstrating the potential for future exports, once domestic supply needs are met.