Agricultural commodities — and the industry that supports them — should do very well over the next few years, suggests Jim Powell, international investing expert and editor of Global Changes & Opportunities.
America is the OPEC of agriculture. Every major food crop is grown here in abundance. Moreover, we have the capacity to considerably increase our yields. We already own two of the world’s most productive agricultural companies in our model portfolio: Archer Daniels Midland (ADM) and ConAgra (CAG).
Although nothing on Wall Street can be considered a buy and forget it investment, ADM and CAG come close to that mark. Both companies are ideally suited for long-term portfolios and family trusts.
We also own Deere & Company (DE) the world’s leading producer of farm equipment that includes fully automated tractors, planters, and harvesters.
Deere is bringing to America's farms much of the new technology that vastly increased efficiency — and profits — in the manufacturing industry. I think Deere is another excellent choice for long-term portfolios.
Meanwhile, there are dozens of agricultural crops that have exceptional long term promise. If you want a one-stop investment in the growth of the agriculture industry, the VanEck Vectors Agribusiness RTF (MOO) is the way to go.
The Moo fund — as it is called — tracks the movements of companies that produce agri-chemicals, animal health products, fertilizers, irrigation equipment, farm machinery, livestock production, aquaculture — and the crops themselves.
Meanwhile, the most important agricultural asset of all is fertile land that produces most of the food we eat. The importance of farmland is increasing rapidly in today’s overpopulated world where the demand for more food is soaring. I can’t think of any asset that has a brighter future for long-term investors.
In our November/December 2021 issue I recommended the Gladstone Land (LAND), a real estate investment trust. It is as an excellent way for non-farmers to benefit from farmland price increases. Gladstone grew the value of its farmland from $75 million in 2013 to over $1.50 billion today. I expect the expansion to continue.