Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Agri-Food Prices Make New Highs

Commodities / Agricultural Commodities Aug 31, 2011 - 12:45 PM GMT

By: Ned_W_Schmidt


Unburdened by the failure of Keynesian socialism, China continues to grow. India, despite repeated self inflicted political wounds, is also likely to experience an expanding economy. With the EU suffering from another financial crisis, it is unlikely to have a positive economic experience in the next few years. In the U.S. job killing policies and regulations of Obama regime stand in the way of expanding employment.

Investors should seek out positive opportunities, and ignore failing economic sectors. Those markets and entities that serve the economic growth of China and India will expand. Those that serve Western economies, hamstrung by the ongoing failure of Keynesian economics, should be avoided. China and India over the next decade will create a middle class of consumers greater than the population on North America. Those middle class consumers will do as all others have, eat well.

Agri-Food Price Index

Source: Agri-Food Value View

Agri-Food Price Index, pictured in above chart, recently went to a new high, after consolidating for several months. Duration of most recent correction was similar to that of the last. Fortunately, the depth was far less. Commodity markets have not experienced level of leveraged speculation of previous bull run.

Importantly, much of recent movement in Agri-Food prices seems more oriented to individual markets rather than being of a broad based speculative nature. Soybeans, for example, just went to a new 90-week high due in part to structurally bullish nature of that grain. Sugar's price will now be determined permanently by Chinese consumers as that nation has become a net importer in recent years. Income growth there will now determine another Agri-Commodity's price for the world.

Three ways exist for investors to participate in the benefits of expanding Agri-Food demand from China today, and India tomorrow. Investing directly in commodities, however, is not well suited for most investors. Agri-Land is another. Despite the high returns in recent years, some opportunities still exist, as we identified in our recent report on U.S. Agri-Land. Third way is through Agri-Equities. While Asian Agri-Equities probably offer best potential, large multinational Agri-Equities, what we refer to as Tier One, probably are the best approach for most.

Tier One vs S&P 500

Chart above is of a price index for large, multinational Agri-Equities. Over time the performance of this group has been excellent. We do note that a major correction was experienced during the Bernanke financial fiasco of 2008-9. These stocks have also been correcting along with the market, and August has been rather difficult. For one, investors decided to drive their tractor stocks into the ditch.

Last major correction lasted nine months. Thus far these stocks have corrected for four months, and conditions are far better than the 2008-9 period. Some downside may yet be added to the depth dimension. End of September or early October should, given the movement in Agri-Food prices, be an excellent time for adding these Agri-Equities to portfolios. Now is the time to do your research.

5th Annual U.S. Agricultural Land As An Investment Portfolio Consideration, 2011 has been released, and is now available. This report is the definitive annual study of returns earned on U.S. agricultural land. Includes analysis of both crop land and pasture land for important agricultural states and identifies best current investment opportunities. This unique, though dry and boring, statistical analysis is intended for sophisticated investors. Obtain it at:

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View, a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To contract Ned or to learn more, use this link:

Copyright © 2010 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules