This page has been archived and commenting is disabled.
Guest Post: Very Few People Understand This Trend...
Submitted by Simon Black of Sovereign Man blog,
There are only a few people who get it: the era of cheap food is over.
Then there’s bonehead government policy decisions to contend with... like converting valuable grains into inefficient biofuel for automobiles. Paying farmers to NOT plant. Banning exports. Etc.
Of course, the most destructive is monetary policy. The unmitigated expansion of the money supply has led to substantial inflation of agriculture commodities prices.
These fundamentals overwhelmingly point to a simple trend: food prices will continue rising. And that’s the best case. The worst case is severe shortages. This is a trend that thinking, creative people ought to be aware of and do something about.
One solution is to buying farmland overseas. It provides an excellent hedge against inflation, plus it’s one of the best (and most private) ways to move money abroad, out of the jurisdiction of your home government.
In a way, overseas farmland is like storing gold abroad. But unlike gold, it produces a yield, ensures that you have a steady food supply, and even provides a place to stay in case you ever need to leave your home country.
So where are the best places to buy?
After travel to over 100 countries, looking at more properties than I can count, and investing in quite a few of them, I’ve come up with a few top picks that meet the following criteria:
- cheap land costs
- low operating costs
- highly productive soil
- low political risk (confiscation, regulation, market interference)
- foreigner-friendly ownership rules
- clear water rights
- climatic stability
Believe it or not, these simple requirements eliminate most of the world. Much of central and Eastern Europe is too politically risky. Western Europe and the US tend to be cost prohibitive. Most of Asia disallows foreign ownership of farmland. Etc.
But there are still several places that remain. I’ll share two of them:
1. Chile. No surprises, Chile ticks all the boxes. Land costs are very reasonable, and operating costs are low. The soil in regions 6, 7, and 8, is some of the most productive on the planet. And best of all, Chile has some of the clearest, most marketable water rights in the world.
Another great thing about Chile is its location; it’s counter-seasonal to the northern hemisphere, so Chilean harvests tend to come at a time of tighter global supplies, pushing up prices.
As an example, we’re currently harvesting blueberries at our farm in Chile’s 7th region. Global blueberry supply is tight in November, so the price we receive is 35% higher than if we were in the northern hemisphere.
See www.chile-farmland.com for more information, it’s a fantastic resource.
2. Georgia. This may be shocking to some, but Georgia is a stable, growing country that’s definitely worth betting on.
Putting boots on the ground there, it’s clear that Georgia is on an upward trajectory with a bright future, much like Singapore was decades ago. Taxes are low, and the country is open to foreigners.
In fact, the government realized that they have tremendously high quality farmland, yet limited expertise in farming. So while most nations shut their doors to foreigners owning strategic farmland, Georgia went abroad actively seeking foreigners to come to their country.
They hit the jackpot in South Africa, offering land, financial incentives, and even citizenship opportunities to South Africans who would move to Georgia and work the land.
Land costs in Georgia are very low; top quality crop land costs about $3,000 per acre, compared to $10,445 in Iowa, or $12,000 in California. Yet simultaneously, yields are very high for everything from corn to wine gapes to peanuts, on par with both of those states.
It’s definitely a contrarian agricultural investment worth considering.
»
- 33283 reads
- Printer-friendly version
- Send to friend
- advertisements -
Worst article I've ever read. Get this farmer out of ZH.
best one I've read in years. It's precisely what I'm looking for. What the fuck do you THINK your gold will buy you? Entry into a foreign land where you can survive. The rest of the world will face totalitarian collapse, Fukushima radiation leakage & global warming won't let up any time soon BUT South America is the least damaged from all this so get ye there using a 9999 fine passport that shines like the dawn itself.
If the sickcare bubble pops and war / starvation breaks out, then the food bubble might pop as well. Commodities cannot increase in price continuously without impairing demand.
Except (shhhhh) of gold of course.
Having said that we are nowhere near a food bubble, but we will be.
Why are people so pessimistic when the answer is so simple? The laws of supply and demand always prevail in the long run, and on a long enough time horizon we all are dead (ZH). If there isn't enough food fertility declines leading to less population over time.
The starving people in impoverished countries are starving not because there isn't enough food, it's because of a distribution problem exacerbated by corrupt governments. No need feeling guilty about cleaning your plate worrying about all the starving kids in Africa. How would the extra get to them anyway?
The fear-mongering continues as it has for my entire lifetime and quite frankly I'm getting tired of it. The Fiscal Cliff wasn't an issue until TPTB decided it was an issue, but the warning signs have been there for decades. Why is it that we have all this worry and no optimism? People are preparing for the worst and not planning for anything otherwise. What if the worst doesn't come in your lifetime?
What a waste of a precious life.
I agree. In fact, I'm off to hand-feed rainbow skittles to my pink fluffy Unicorn.........
Pink Fluffy Unicorns Dancing on Rainbows YouTube
"What if the worst doesn't come in your lifetime?"
Then I have a beautiful garden that I feed my family from, children who are educated on where there food comes from, and how to preserve it. Just in case it happens in their life time. Quit watching prepper TV shows. It is blinding your reality on what naturalists think sustainability should be. Extremes never reflect a balanced sustainability lifestyle, only provide sensationalized entertainment for bleating sheep. Just because you prepare for the the worst, it does not mean you can not enjoy the fruits of your labour. Plus some on us live in in weather zones that dictate preparation.
The FAO certainly believes there is a food problem, and they should know.
http://www.fao.org/infographics/pdf/FAO-infographic-SOFI-2012-en.pdf
One thing we have seen about rising food prices in poor countries is it tends to bring down governments. I think this lesson has not been lost on the greedy autocratic rules who will make sure they can keep their power bases and wealth flowing by making sure their people do not get too hungry.
BULLISH!
Ah, this one demands a MillionDollarBonus sham reply telling off the doomer libertarians that just stack the deck at the IMF :D
New report out on the dangers of GMO: http://earthopensource.org/files/pdfs/GMO_Myths_and_Truths/GMO_Myths_and...
(pdf, 4.2MB)
For quick overview: http://earthopensource.org/index.php/news/60-why-genetically-engineered-...
Study done by genetic engineers who are not so much against genentic engineering for for instance curing genetic disorders but who are against GMO. They explain very well what are the dangers of GMO.
" New report out on the dangers of GMO: earthopensource.org ... "
Who the heck is "earthopen source dot org"?
What university are they affiliated with?
Ot is this just another populist activist organization with a HO regarding GMO products?
One of them is with King's college of medicine in the UK but they wrote this report independently. They compiled peer reviewed studies into GMO.
And an univeristy taking research grants from GMO companies in order to research GMO is not biased you say?
Then why not cite those primary documents than a rehash that might be in error or have an agenda?
That's my point ...
AND furthermore, I suppose you have *no* issue with governments funding 'global warming' studies at said univeristies either?
Pay to play? And you get what you pay for (pay for global warming studies, get results which positively INDICATE global warming)?
If you had cared to bother to look at the document than you would have seen plenty of references to studies and reports.
What about big oil financing studies to 'find' no effects of global warming? Governments often don't directly sponsor research, often they do. Universities are often free to decide on which studies they spend government subsidies. But do you really trust big companies more than governments? Governments are often in the pocket of big companies anyway. Do you really trust the FDA while their board is full of ex-Monsanto people?
And independent researchers often don't get any funding at all, neither from government nor big business.
" If you had cared to bother to look at the document than you would have seen plenty of references to studies and reports. ... "
Well, that is good to know.
Still, you're marked down points for not citing primary documents and reports and instead a 'layman' rehash with potential for significant 'propagated' and generated errors ... but that's just me.
Others MMV.
But the point is, these guys are not layman but genetic engineers so people that something about GMO. No need for me to cite original studies. Just follow the references.
" ... What about big oil financing studies to 'find' no effects of global warming? .."
What studies? Cite one. (We have had no warming the 16 yrs or so, but no one who is serious doubts the LWIR effects that CO2 exhibits ... if you have studied IR spectroscopy for instance you understand. The real 'call' the CAGW crowd makes is for tipping points that numerical models would indicate, but then, those models 'run off the rails' anyway w/o CO2 even being part of the mixture ...)
To be honest Shell and other have financed Greenpeace and also climate scientsts as well, so, really you're throwing a bluff; try to profer a false narrative ...
Chilean farmland is often seperated from it's water rights, which will have to be purchased potentially from some other party -- if you can get them at all. Land there is very good quality, and if you eat strawberries , blueberries, rasberries, grapes, or a host of other fruits during the winter in the states good chance it came from there.
However, these are all labor intensive products to grow, and if you buy bare land you will spend a few years (or more) putting the appropriate plans into productive state where they will actually bear fruit.
I am surprised that 'simon' has not mentioned Uruguay, where I am farming at present. As a 'gentleman' industrial grain farmer, I have found it to be a great country where everything 'works' and you need not BE on the land to make a living from the land.
A recent report out by deutscheBank showed avge yields of farms growing soy and wheat (what I grow) and my land easily exceeds US avges in both categories, while I have the opportunity to 'double crop' the land 3 of 4 years.
And if anyone wants a blueberry farm in Uruguay, I know of (if i recall correctly) 20 ha in blueberries for $15k/ha. Or with closing costs about $6k an acre. Not my thing, but who knows...
These countries should be stupid to sell to foreigners. That is a serious food security concern. Better to kick the foreigners out and take land from big land owners -whether they are the state and private- and redistribute over the local population. Invest in technology and education for these farmers so they can produce effectively and efficiently. Then sell any surplus to the foreigners and let the market do the work.
Not stupidity in the least. Let someone else develop the land, bring in the equipment, get it up and running. Food shortage hits, just seize it for the country. Brilliant plan really.
That is also an option indeed but then expect to get an army on your doorstep.
Seizing assets has not done a damn thing for Argentina, Venezuela, or any other country that tried it. Look at the mess that is South Africa no less.
A smart government cares not who owns the assets, they care solely about the tax base and what it throws off. Seize assets willy Molly and you shut down foreign trade, and other than places like Somalia or North Korea, you need that trade.
Take my land and maybe my government seizes your grain on the seas in return. Doesn't work out so good, no? And then how
Much do you now have to spend on military as a smaller nation to defend your takings? Does your SWIFT access get shut off? Your foreign reserved frozen?
Very myopic view.
Much easier to raise taxes.
Seizing assets has not done a damn thing for Argentina, Venezuela, or any other country that tried it. Look at the mess that is South Africa no less.
A smart government cares not who owns the assets, they care solely about the tax base and what it throws off. Seize assets willy Molly and you shut down foreign trade, and other than places like Somalia or North Korea, you need that trade.
Take my land and maybe my government seizes your grain on the seas in return. Doesn't work out so good, no? And then how
Much do you now have to spend on military as a smaller nation to defend your takings? Does your SWIFT access get shut off? Your foreign reserved frozen?
Very myopic view.
Much easier to raise taxes.
If cant can't live on it, I'm not buying it. The US maybe screwed up, but I'm here for the long haul. There are plenty of great parcels here.
The Author makes the common mistake of assuming that man never innovates. He does if there's profit in it. Several companies are working on protein production via algae culture farms. Early results are showing protein production of 100,000 lbs per acre vs. 5,000 lbs with normal agriculture. If these experiments are successful world food production could go up orders of magnitude. Algae farms require almost no water and can be placed in areas that are biologically unproductive or even in the sea itself. See for example: http://cellana.com/, or http://www.alltech.com/future-of-farming/algae-the-growth-platform, or http://biomassmagazine.com/. If this technology really gets going most of the worlds agricultural lands will revert to scrub and forest.
Yes man can innovate, but the devil is in the details and flux matters. There are hard limits and once the majority of the population is reduced to simply fighting to survive the resources to innovate are harder to come by. To pretend that there aren't limits is beyond stupid.
: 0
There are only a few people who get it: the era of cheap food is over.
Global net population growth creates over 200,000 new mouths to feed ever single day. Yet supply of available farmland is diminishing each year due to development, loss of topsoil, peak production yields, and reduction in freshwater supply.
You know, I'd be much more impressed if you provided actual evidence of food prices going UP. The fact that you avoid providing the one data item that would prove your point suggests that you have something to hide.
Food provision was famously predicted to collapse by Ehrlich in the 1970s - by the end of the century we were all going to starve. In fact, food has become ever more abundant and cheap as the population rose. Julian Simon vanquished Ehrlich with his famous bet on commodity prices, and thus proved his Cornucopia Theory - google it.
I suspect very few people 'get' this because it's simply not true...
Google FAO food index....
http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
You can now go back to making shit up on the fly...
So Ehrlich was off by a few years, BFD....
And Simon would have lost that bet if had been a few years later...
From that same site:
By mid-2008, international food prices had skyrocketed to their highest level in 30 years. This, coupled with the global economic downturn, pushed millions more people into poverty and hunger.
In December 2010, the FAO food price index rose above its 2008 peak. The index dropped to an 11-month low in October 2011, but food prices still remain generally higher than last year and very volatile.
You need evidence that food prices are rising?
Who the heck does the shopping at a U.S. store in your home?
I've been monitoring this all year and we are getting killed in our area. Food prices have jumped dramatically in our corner of the U.S. It has been nuts to monitor prices of various items as we have.
@ Laws of Physics
To pretend that there aren't limits is beyond stupid.
No. Remember the concern about the shortage of oak trees in Britain in the 1700s, which was going to make it impossible to build ships by 1850? And then remember how Britain had the biggest navy in the world by 1900?
Your mistake is to think that human endevor is limited by the physical assets that we can appreciate today. In 1700 nobody knew that ships could be made of steel. It was not oak trees which limited Britain's navy, it was human innovation, discovery and development.
And, as far as we know, that has no limits. Perhaps you'd like to describe to me what those limits are? The Greens, of course are mindless and cannot understand this...
We have plenty of innovation in the farm sector. What do you think Monsanto et al do?
This is the same confusion people bring to the energy sector when you hear ridiculous claims about the US becoming energy self-sufficient. Maybe we have plenty of energy, but what is the EROEI? Is it the RIGHT kind of energy? Sure gas is cheap(er), but it won't send a semi down the road. Or by the time it does we will have to invest billions to make it happen. And what happened to the 'hydrogen' economy?
There will always be innovation, but it may not always scale. The devil is in the details...
Don't forget the whate oil panic in the 1870s. Whales were disappearing and it was stated that all the lamps in America would go out and we would be left in the dark.
I know of a place to go that nobody here has mentioned. I am glad nobody even sees it yet. Clue: It is in the English commowealth, only less than 5k live there -all english speaking and protected by a higher amount of military personnel-, has one of the highest per capita incomes, is completely insulated from any major global power, would surley do very well in a global thermonuclear resolution, its government has always had fiscal surpluses and is under populated.
This fits in well with the discussion
http://finance.fortune.cnn.com/2012/11/16/gas-shortages-sandy-2/?iid=HP_...
and
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WGTSTP11&f=W
As I repeatedly pointed out, the East Coast was as historically low gasoline stocks before Sandy hit...
The manner in which shortages arose will be replayed in the food sector one day....
"... was as historically low ..."
Care to extend and amend Flak? Oh, sorry, you're locked in with that now ...
Is it hard to function with a pickle up your ass?