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- Grow richer every day with this
investment - A historic supply crunch
- How to invest today
Does your
portfolio have exposure to the most inevitable bull market in the world? I’m talking about a long-term trend that has
nowhere to go but up. It’s literally a
life and death situation.
The
alternative to a bull market in these commodities is something the world’s
population has to strive to avoid at all costs. It’s more important than oil, more vital than coal, and way more serious
than gold, copper, iron – or any other industrial metal or energy
commodity.
Because if
there’s not more production of this particular group of commodities every day,
in perpetuity, most people on this planet will starve.
Yes, I’m talking about food. And I realize it’s not an “exciting”
investment, not like some new oil discovery or a massive gold bonanza. But the world’s population is growing.
According to a 2004
study from the United Nations, “World
population is projected to grow from 6.1 billion in 2000 to 8.9 billion in
2050, increasing therefore by 47 per cent.”
Okay, so a 40 year timeline is a
little long, but consider another statistic from the UN:
The world’s population will increase
by “57 million a year on average between
2000 and 2050…
It means that, on average each year for 50 years, world population will
expand by about as many people as now live in Italy.”
So a new food consumer is born every
half second. This market differs from
any other – because food (and water) is something that everyone needs to
live. Sure, lots of people use oil,
coal, copper and other energy commodities – but the market for food is so much
more pervasive and important.
And sure, you can make the argument
that much of the world’s food production is dependent on cheap energy, but it’s
a chicken vs. egg situation. We wouldn’t
use so much oil if we didn’t need so much food!
So there are more people every day –
and this trend will account for increased demand. But what about supply?
I found some
alarming statistics in a paper by some folks at Utah State University titled, “Fifty Years of Farmland Change: Urbanization, Population Growth and the
Changing Farm Economy.”
They say that
total farmland in the continental US declined by over 200 million acres between
1949 and 2002.
It’s an inevitability that a long term
trend of fewer farms and less farmland coupled with more people can not last
forever. The short story is that even
the big producers will get pinched as energy prices continue to rise, along
with demand for food, and eventually demand for farm land.
Someday
we’ll see a mad scramble as people crave degrees in botany and become farm
advisors, just like we saw everyone clamor to go to business school a few years
ago to become a Wall Street advisor.
In fact, we
have a mini-model to base this prediction on. After the USSR fell,
our friends in Cuba saw the
end of the many and sundry subsidies they received from Russia, whether they were oil,
food, or machinery.
Overnight,
farms sprung up around Cuba
– and today, farmers are among the wealthiest people on the island.
The good
news for us is that we’re talking about easily tradable commodities here. Corn, wheat, soy, even picks and shovels like
tractors, fertilizer and other farming hardware are easy to buy and sell in the
stock market with any brokerage account.
We don’t plan on timing the market on
this one. We already have several
agriculture plays set up across several portfolios, including a “green”
fertilizer company in the SmallCap Investor Pro
lineup. It’s up 76%.
We also have
a fertilizer producer in our Global Commodity Investing
portfolio that’s up over 34% so far. Click here to find out more
about our 30 day trial subscription to Global Commodity Investing, and to
find out the name of this fertilizer company.
In slightly
unrelated news, it’s "Send Us Your Tickers" week at TradeMaster
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Now, I’ll
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And I think you’ll agree, $9.95 for a personalized video charting review of
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Click here
to send Jason your ticker.
Good
Investing,
Kevin
McElroy
Editor
Resource Prospector