Farm REITs: REITs stand for real estate investment trusts and farm REITS are simply real estate investment trusts that are part of agricultural corporations.
Farmland: You can invest directly in farmland. Some of the bigger companies that allow you to invest directly into farms — they work like REITs but are not really considered REITs — are AcreTrader, FarmTogether (not to be confused if looking online for it, with the video game, Farm Together) and Farmfolio, which is based out of Colombia. These agricultural companies generally buy land and then lease it to farmers or investors.
Agriculture Stocks: Some publicly-traded companies specialize in investing in the farming industry. Some of the leading agricultural stocks currently include CF Industries Holdings Inc., Cal-Maine Foods Inc. and American Vanguard Corp.
Exchange-Traded Funds (EFTs): EFTs are a basket of securities purchased or sold through a brokerage firm on a stock exchange and three are EFTs that specialize in the agriculture industry. These are known as agricultural commodity ETFs, sometimes called Ag ETFs, which are funds that invest in companies that produce foods such as grains, dairy products and livestock.
Mutual Funds:Mutual funds are companies that collect money from investors and then put that cash into securities such as stocks, bonds and short-term debt. You could put your money into mutual funds that specialize in investing in the agriculture industry.
Soft Commodities Markets: These are futures contracts (a legal agreement to buy or sell a commodity asset or security at a predetermined price at a specified time in the future). Soft commodities are considered commodities such as coffee, cattle and sugar (commodities that can be grown are a good way to think about it). Hard commodities tend to be mined, such as gold or copper. Earlier, we mentioned the risks built into the agricultural industries. Investors who buy and sell on exchanges in the soft commodities market are attracted to the risk because while you can lose big, you can also win big.