Rogers & Soros: Farmland “One of the Best Investments of Our Time”
Jun 16th, 2009 | By Contrarian Profits | Category: Stock Market Investing, Top StoryWe have no shame here at Notes. When legendary underground investor Jim Rogers makes a call we listen. And we listen good. Rogers correctly predicted the commodities rally in 1999. And between 1970 and 1980, when he partnered with George Soros at the Quantum Fund, his portfolio made gains of 4,200% when the S&P 500 rose by 47%. To say he’s a legend is an understatement.
Rogers and Soros are snapping up farmland right now. These two old hands are betting that demand for food will soar, pushing up the price of arable land. This from MoneyNews.com:
- Falling commodity prices aren’t bringing prices for farmland down with them. Even as the price of grain goes down, the cost of the land it’s grown on keeps going up, leading George Soros and other guru investors to bet big on agricultural land.
The fundamentals are easy to understand: Over the next 40 years the population of the world is projected to grow from 6 billion to 9 billion, hugely increasing the strain on arable farmland worldwide.
The spiking grain prices that caused food shortages and rioting in dozens of countries in spring of 2008 fell some 50 percent by December. Yet even after the correction, grain prices remain above their 20-year average, and food stocks around the world are still near 40-year lows.
“Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050,” Joachim von Braun, director general at the International Food Policy Research Institute, told Fortune Magazine.
“With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land.”
“I’m convinced that farmland is going to be one of the best investments of our time,” says commodities guru Jim Rogers.
Long-suffering readers will know that we’re bullish on the PowerShares DB Agriculture Fund (NYSE:DBA). But there are a number of other ways to invest in the ag sector.
These include agricultural chemical companies such as PotashCorp (NYSE: POT) , Mosaic (NYSE: MOS) , Agrium (NYSE: AGU) and Terra Industries (NYSE: TRA). Also worth considering is farm machinery outfit Deere (NYSE: DE) and farm products company Archer-Daniels-Midland (NYSE: ADM).
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yes agree. Farmland is a good bet and longterm is one of the best bets. Look for irrigated, if you can find it,
so you have water rights. that’s a big plus . i wish i had bought farmland around here when it was cheap!!
oh well. i am saving up for some acreage and will buy as time goes by. it’s good for our society to protect its own food supply what with all the people coming along to 9 Billion. hard to imagine, and we need water lots of water too that’s for sure
The limit on the value of land depends on things like cost of production and security and not just demand. As food prices rise to cover the costs of land, control of the land, and production of the land the land will be invaded by hungry people. Maybe it would be better to invest in the current owners of the land.
Cresud (CRESY) is the largest publicly traded farmland owner of latin america. They own over a million acres of farmland throughout Argentina, Brazil, and other latin american countries, where the majority of the world’s freshwater is, which makes the farming their much more efficient/higher crop yields.