Investing in Agriculture – A Move Toward Organic Products
Investors are too often concerned with the here and now—which trends are currently doing well and which sectors have historically proven to reap the most rewards. What savvy investors do, however, is look to the future, even if it means seeming to take a step back. Investing in agriculture seems like something from the Great Depression-era when investment banks were foreclosing on homes and farms right and left. It certainly doesn’t seem like and investment opportunity of the future. Or does it?
By the year 2050 the worldwide population will reach 9 billion people. That’s a lot of mouths to feed. Even with small farmers being put out of business by agricultural mega corporations, investing in agriculture today may mean a greater future tomorrow. It’s been said that owning a piece of land is the single most important investment anyone can make, and this is certainly true during any financial crisis. With grain consumption on the rise, grain inventories have fallen to their lowest levels, which means that grain production will need to happen somewhere soon. Biofuels are also driving up agriculture demand. Ethanol is one biofuel that takes massive amounts of corn to produce, so some investors are taking advantage not only of the agriculture sector, but the alternative energies sector as well.
Food prices reached their highest levels in history by 2011, meaning that more agriculture will be needed to keep up with demands and keep costs low. This lack of supply facing an overwhelming demand means that agricultural companies will seek to make crops more readily available by creating better technology in both farm equipment and pesticides. On the flip side, organically-grown food is in demand more than ever. As much as 70% of Americans buy organic food in one form or another on occasion, with 25% buying it each week, so investing in organic food companies is a smart move this early in the organic game.
Not only is investing in organic food companies a smart move financially, it can also be rewarding both environmentally and socially. Consider this the early stages of a food revolution that has the potential to change the way we as Americans eat. Demand for organic products will only continue to rise as mega giants that produce pesticides and genetically modified seeds will be on the decline. The long-term potential in agriculture is staggering, so research all options carefully to decide which part you want to play.