Good farmland – cheap and scarce – Farming a Great Business next 20 yrs

Posted by Dennis Avery - comments via Faber and Rogers

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….buying greenfields for farming in Brazil and farmland in Canada to get into the farming business, on the basis that farming is going to be one of the great businesses over the next 20 years

Jim Rogers – The legendary co-founder of Quantum Fund

The best investments – gold and farmland say’s Marc Faber


The Shape of Tomorrow’s Farming

By Dennis Avery – director of the Center for Global Food Issues at the Hudson Institute

Tomorrow’s farming will look like today’s, only more so. Crop and livestock yields per acre must triple again to protect wildlife habitat. Biotechnology will be increasingly vital. Confinement feeding will be even more important, to leave room for wildlife. Organic will prove to be a fad, as will locovores and vegetarians. Activists will be less credible than over the past 50 years.

The world’s farmers are facing the biggest challenge in their history. Expect more than 8 billion humans by 2050, with 7 billion of them affluent—compared with only 1.5 billion affluent today; trade and technology are powerful forces for increased wealth. Expect also a continuing surge in the number of companion cats and dogs, none of them vegetarian.

World food production must double by 2050, and production of meat and milk will more than double. Children need the key micronutrients of livestock products to prevent such diseases as pellagra and blindness due to severe Vitamin A deficiency. Their cognitive development also seems to benefit from high-quality protein.

Farming intensity must triple on the best land, in order to protect the poorer land which houses three-fourths of the wild species. Good farmland will become even more important, as one of the scarcest resources.

… the 7 page report HERE


Tom Fernandes: Going Long On Agriculture

Crigger: Is farmland an overlooked opportunity for investors?

Fernandes: Yes. We think it will be a great long-term investment, a great place to be. Most people on an institutional level don’t get too excited about it, because it’s a low yielder. It yields maybe 2-4 percent on investment, net of taxes, from a landlord perspective. That’s pretty low in an environment where muni bonds are yielding over 10 percent in some situations. A lot of institutional investors, you show them farmland investments, and they really don’t get too excited. So from a contrarian standpoint, that’s not too shabby.

But you have to be careful. People piled into farmland investing in the 1980s, and interest rates went higher and clobbered a lot of levered investments, most of which were farmers. It really depressed farmland prices, and it took more than a decade to improve the appetite for farmland.

So you’ve had a pretty big move in the prices. If I go back to Iowa in the early 2000s, farmland in the average acre made about $1,500 to $2,000 per acre. Now you’re pretty solidly at $3,500 per acre on average, and that includes less desirable land. Premier land may be $5,000, $6,000 per acre. So there’s been a big move there, and it’s not for the faint of heart. But you don’t have contango, and so on. Farmland’s something that we’re interested in, and we’re working on some investments there. It’s a good place.

….read the whole article HERE


Using Grains To Diversify Your Portfolio

“One such popular fund is the PowerShares DB Agricultural Fund (NYSE Arca: DBA), which holds a basket of 11 futures contracts dominated by grains. Although live cattle is the index’s largest individual holding, together corn, soybeans, wheat and Kansas City Wheat make up 35.84 percent of the portfolio. The rest of the index is divided among other top-performing ag futures, including sugar (11.33 percent), coffee (11.14 percent) and cocoa (10.45 percent).”

….read the whole article HERE