As Agriculture Soars, and Food Prices Rise, How Investors Can Benefit

[Joanne98]

It looks like rising food prices have finally started to catch the eye of the financial press. Bloomberg reports that 48 agriculture ministers from around the world met in Berlin to discuss the risks associated with increasing food prices. Just last month, the UN Food and Agriculture Organization announced that global food prices have reached an all-time high since their food price index began in 1990. Governments, especially in low-income countries, are getting nervous about the prospect of food riots. Back in 2008, riots and protests erupted in more than 30 nations because of food price hikes. Amid all the recent ruckus in Tunisia, few seem to have noticed the food riots in Algeria this month.

As usual, speculators are bearing the brunt of the blame. However, in reality, food prices are soaring and becoming more volatile because of supply-side issues (e.g. weather, crop failures, inventory, etc.) combined with the inflationary policies of the world’s largest economies. Food is a necessity. When central bankers decide to expand the money supply, some of this new money will undoubtedly find its way to agricultural commodities markets, pushing up prices in the process. This is why many people are so bullish on the agricultural sector. The rest of this article is devoted to describing some ways personal investors can benefit from this.

As far as ETFs go, MOO is a popular choice for investors looking to take advantage of higher food prices. This fund tracks the DAXglobal Agribusiness Index, which is composed of stocks in agricultural chemicals, agriproduct operations, agricultural equipment, livestock operations and biofuels companies. Big industry names like Potash (POT), Monsanto (MON) and Deere (DE) top the holdings list. Nearly half of the holdings are U.S. stocks but the rest come from all over the world. This regional diversity protects investors from losses resulting from natural disasters.

http://seekingalpha.com/article/248210-as-agriculture-soars-and-food-prices-rise-how-investors-can-benefit

Growing a big vegetable garden this year will help too.

[Newsjock]

1. How about by outlawing commodity speculation

If the contract buyer can't take physical delivery of that boxcar of wheat or that tanker of oil, they can't buy the contract. Goddamn vultures.

[Andy823]

2. +1,000,000,000

I could not agree more! What they do know is criminal, jacking up prices of food and oil so they can make millions, even billions in profits while people starve to death because they can't afford food!

[ThomCat]

3. Yes, that would be a fucking awesome regulation!

:applause:

[truedelphi]

4. the Food Safety Act was a total sham, and it will greatly

Reduce the American family of the chance to receive organic produce and other foods from American growers and suppliers.

If anyone in Congress really cared about the health of the American Public, they would have outlawed MSG from being added to foods. MSG contributes to the depression that so many people are now afflicted with. (Just over the last week, I heard of three local citizens who killed themselves.)

As the smaller organic farmers go under, as Wall Street will not loan out money to them, and the new regulations require vast amounts of paperwork, Americans will find most "organic" food will be coming from Mexico and China. I have no idea how either nation can supply us with "organics" - the water in many places in these two nations is so filled with heavy metals and what not, that the food itself is toxic.

But who cares?

Monsanto executives helped write the bill, and rejoiced when it passed, and those in the know are using what they know to gamble on food prices going sky high.