Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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