Sunday, February 17, 2008

Agricultural, it's all about the diet ...

Agricultural-related investments remains one of the big, visible, themes going forward over the next ten years. While there's been some mainstream acknowledgement of these major food issues going forward, for the most part, the media has been relatively quiet about the food inflation.

Maybe that's because many countries focus on "core" inflation, which ignores volatile changes in energy and food. These, especially food pricing, are likely to continue to ramp upwards over the next five to ten years.

Feeding the world continues to develop into one of the biggest stories of this century. The supply and demand curves for food, especially due to changing diets in the Far East to have more dairy and meat, continues to favour higher prices for these commodities. Other drivers of agricultural prices are:

- Strong population growth, expected to reach 7 billion by 2013;

    - Rising income in developed markets and increased demand for soft commodities in developing markets;

    - Climate changes challenging agricultural production processes and product quality;

    - Arable land per person is decreasing;

    - Demand for agricultural products from Bio-energy (sustainable energy resources) market adds an important and competitive new demand source. Agricultural commodities are getting
    more and more important for energy generation.

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    This is something I have written about here (provides some specific suggestions, which I continue to support) and here. I re-iterate those calls to make agriculture-related an important part of your portfolio. In Canada, you can now also consider a recent Claymore Investments ETF product, COW, which invests in agricultural companies.

    Despite recent run-ups in prices of companies serving the agricultural sector, and the underlying commodities themselves, I consider that this investment theme is still just early in the third inning of a ballgame; a ballgame that itself may even go into lengthy overtime.


    The Confused Capitalist

    Friday, February 15, 2008

    Happy Anniversary

    Just a little party for me ... to the tune of the Little River Band hit, "Happy Anniversary". This weekend is the anniversary of the start of this blog some two years ago.

    Happy anniversary baby,
    Got you on my mind,
    Happy anniversary baby,
    Got you on my mind.

    Thanks to all my readers ... I've enjoyed the ride so far ...


    The Confused Capitalist