Worldwide, populations are soaring. For the first time in decades, despite advancements in technology, food supplies are inadequate.
Witness the “pasta protests” in Italy or “tortilla rallies” in Mexico.
According to the International Food Policy Research Institute: “Demand is running away. The world has been consuming more than it produces for five years now. Stocks of grain – of rice, wheat and maize – are down at levels not seen since the early 80s.”
And, our idiotic politicians think it’s a good idea to burn corn. We are burning food, while food is scarce—always good for a commodity bull run.
The problem is just getting started. Apparently, countries are drawing from their national stocks, which will soon be emptied.
The cupboard will be bare.
Observers estimate, within 12-24 months, growing nations like China and India will go into the open market and bid up the price of food commodities, in order to restock supplies.
Naturally, this will bode poorly for global inflation doves, as the price of pork, beef, chicken and vegetables bust through the fucking ceiling. Nonetheless, there is always hope, right?
To top the shit sundae off, fresh water supplies are dwindling, partly thanks to global warming (think LNN, VMI).
For the record, this all sounds somewhat ominous to me.
Anyway, the way to play the ag boom is via buying commodity related stocks or commodities, of course.
Here’s an extensive list agricultural related equities:
LNN: Irrigation Systems.
VMI: Irrigation Systems.
MON: Seeds and Genomics. Sweet spot for worldwide famine.
SYT: Another Seed fucker.
AG: Farm equipment.
DE: Farm equipment.
ARTW: Farm equipment.
CNH: Farm equipment with a finance arm.
BG: Fertilizers, big food commodity player, edible oil maker.
ADM: Corn fuckers, amongst other commodities.
More risky plays include:
NOEC: Chinese fertilizer.
SEED: Seeds in China.
DRYS: They ship fertilizers, amongst many other things.
GRO: Chinese Seeds and sheep breeding products (no, I am not making this up).
MOO: Agriculture equity ETF, which holds the following positions: Mosaic, Monsanto, Potash, Komatsu, Yara Int’l 5.1%, IOI, Wilmar, CNH Global, Bunge.
DBC: sweet crude oil, heating oil, aluminum, gold, corn and wheat.
JJG: 42.6% soybeans, 35.8% wheat and 21.6% corn.
COW: 67.9% cattle and 32.1% lean hogs.
JJA: 28% soybeans, 23.6% wheat, 14.3% corn, 9.9% soybean oil, cotton 9.3%, coffee 8%, sugar 7%,
RJA: 20% wheat, corn 13.6%, cotton 11.6%, soybeans 8.6%, sugar 5.7%, live cattle 5.7%, coffee 5.7%, rubber 2.9%, lumber 2.9%, lean hogs 2.9%, cocoa, 2.9%, soybean meal 2.15%, canola, 1.92%, orange juice 1.89%, adzuki beans 1.43%, rice 1.43%, oats 1.43%, barley 0.77%, greasy wool 0.72%.
I’m sure there are more “plays,” but this will have to suffice.
In short, the more I research the ag sector, the more I believe in the long term growth prospects. Almost everyone I know is bullish on food commodities, even the bears. Naturally, the trade can become crowded and result in swift poleaxing.
However, the fundamentals demand long term accumulation, with patience being a virtue.
If Jim Rogers is correct, food commodity prices will be 2-3 times what they are now, enabling the above stocks and ETF’s to bank you a little coin.
In other words: Milk the Farmer.