Key features of the current environment include:

• Persistently higher inflation relative to historical norms
• Increased geopolitical and policy uncertainty
• Greater emphasis on strategic autonomy in areas such as energy, food and critical inputs
• A larger role for governments in economic outcomes

These dynamics have been reinforced by recent developments in the Middle East. While a temporary ceasefire has been announced, the implications of higher and longer-lasting inflation remain a relevant consideration for investing in farmland.

Inflation and farmland investments

Inflation affects farmland investments through multiple channels and over different time horizons. In the short term, higher costs for energy, labour and inputs can put pressure on farm level margins. Over time, however, farmland’s role as a productive and scarce real asset means that land values, crop economics and income streams tend to adjust, albeit unevenly across regions, crops and operating models.

Fund positioning

The SDG Farmland Fund is constructed to navigate across a range of inflation environments. Diversification by crop type, geography and cropping system, combined with active management at asset level is intended to reduce reliance on any single inflation outcome. Internal scenario analysis, including escalation and stagflation scenarios, indicates that while near term impacts can be challenging, the medium to long term characteristics of high-quality farmland remain intact. Over time, portfolio outcomes are increasingly driven by asset scarcity, rising replacement costs and operational resilience rather than growth assumptions.

You can now read the full press release at the link below