There has been lots of talk and news about this upcoming food crisis. China and India are starting to have more disposible income and they are starting to consume much more food.
To say that we don’t have enough crops to keep up with the Food demand does not make any sense. There are hectares and hectares of land available and farmers can easily provide enough food supply for all of the earth and especially China and India!
I do think though that the food prices will increase though! Your super market bill will easily double in the next 3 years, perhaps even triple. Here is my train of thought to invest in AGRI and Food.
Production of AGRI products needs to increase to keep up with the WORLD FOOD DEMAND, so more crops needs to be harvested in order to do this. In order to harvest more crops, more seeds need to used and more pesticides and more FERTILIZERS need to be used !
So an investment play is to invest in:
A) SEED COMPANIES
Some of the biggest players are MONSANTO, DUPONT
FERTILIZER AND PESTICIDES companies
-POTASH saskatchewan is a big company well positioned to do well if you believe in the FOOD CRISIS
-MOSAIC potash and fertilizer is also well positioned
Since more crops will be harvested, more machines are needed
DEERE is another play here
WAL MART and Super Marker Chains
Although WAL MART has not grown in 10 Years, an idea is this:
Since WALMART has great purchasing power, they will be able to keep their Food prices low. People will turn to Wal Mart to have a low super market bill!
Although I would never sacrifice quality for low food prices, I think alot of people will continue to buy Food at WALMART. I dont think it will get alot of new clientele but keep their existing clientele.
Organic EXPENSIVE FOODs
This is what I really like, and where I think you can go get 500% return. Small Caps companies (100M to 1.5-2B) that produce independant organic food products. Alot of people will continue eating healthy and their will always be a premium for this ( I pay about 30% more currently to buy organic veggies and fruits).
Start looking for some GEMS in this field
ETFs and ETNs
Very volatile, but you can surely get some good performing ETNS (BARCLEYS , JIM ROGERS AGRI FUND).
I use them alittle, but the fees are usually high and eat big chunks away.
Become a Farmer!! Buy Farm Land!!
Are these the next Billionaires ?? Alot of people predict by 2020, Farmers will be in a great position.
Any feedback is welcomed!