The US Lost 1.9 Million Acres Of Farmland In 2022 – Here's Why It Matters

In 2022, the U.S. lost 1.9 million acres of farmland, according to the latest Farms and Land in Farms report from the U. Department of Agriculture.

America had an estimated 2,002,700 farms totaling 893,400,000 acres in 2022, down from the 2,012,050 farms and 895,300,000 acres recorded in 2021.

The trend is not new.

Since 2015, America’s farmland acreage has decreased by 12.39 million acres. That’s an average loss of nearly 1.8 million acres per year.

One of the main reasons behind this trend is urbanization. Cities and towns are expanding into previously rural areas. And that often involves the conversion of farmland into residential, commercial or industrial land uses.

The American Farmland Trust estimates that the country is losing 2,000 acres of farmland per day in its report Farms Under Threat: The State of the States.

It’s not a good picture.

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Food Security

While developers may see big opportunity in building a row of houses on a piece of former farmland, this trend can pose problems.

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Agriculture is a significant industry in the U.S. Losing farmland can lead to lower agricultural output and reduced food supply.

Meanwhile, America’s population is on the rise. According to projections from the Congressional Budget Office, the U.S. population is expected to increase from 336 million in 2023 to 373 million in 2053.

A larger population means more mouths to feed. If farmland acreage continues to shrink, it does not bode well for food security.

American consumers are already feeling the pain of higher food prices. According to the Labor Department’s latest inflation report, the U.S. consumer price index increased 5% in the last 12 months. Notably, the food index surged 8.5% over the past year.

An Overlooked Investment?

Agriculture may not seem as exciting as artificial intelligence or cryptocurrency, but it is an essential part of the economy and society. Without it, there would be no food on American plates and no clothes for people to wear.

The sector also stands out because of its resilience through economic cycles: No matter what happens to the global economy, people still need to eat.

Investors can gain exposure to agriculture through exchange-traded funds (ETFs) like the Invesco DB Agriculture Fund DBA. 

If you are bullish on specific agricultural commodities, you may want to check out names like the Teucrium Wheat Fund WEAT and the Teucrium Soybean Fund SOYB.

Of course, you can also invest in farmland itself — an increasingly scarce commodity.

Real estate investment trusts (REITs) like Farmland Partners FPI and Gladstone Land LAND also specialize in farmland.

If you don’t like the volatility associated with publicly traded REITs, you can also look into private market investments. 

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