The inflation in the economy is caused by Agflation or agricultural inflation. Basically wheat, beef, pork bellies and commodities are in the middle of a super cycle. Especially wheat and or any derivative used to make oil – sugar cane etc. The price of farm land is set to go through the roof. It is the only foreseeable, property growth area in the States. I have heard that one of the slickest city boys in London James Ferguson bought 29,000 acres in Argentina so it must be safe. A lot of major funds are following suit on the back of the super cycle and buying agricultural land – i.e. in the billions of dollars. Should any one be able to buy and mange farmland like this as suggested for Argentina then a serious killing will be made. If I had the dosh I’d buy around Des Moines in the USA, prices for agric land are up 19% but it is the farmland provider of the American Economy.
Wow, very interesting, can you give a little more information to why a super cycle would happen?
My Dad is a farmer and is thinking of investing in land in Aregentina through the following company:
Anyone have any opinions on investing in agricultural land in Argentina?
And yes it would be a long way to go to spray the crops
Yes - a super cycle is an upward trend that should continue for at least the next 10 to 15 years. I know, most would say you can not forecast beyond the next week for any market. But that is what many hedge funds are referring to as a super cycle and are buying large tracts of land in Argentina, Australia, America etc by the 10,000's of acres. Oil is a prime example of a super cycle because it is a diminishing resource, similarly land is being used to cultivate oil that is corn, rapeseed etc. This is also now being subsidised by the American government and the number of new corn extraction companies in America has gone through the roof. Therefore farmers in the Mid West of USA are producing oil crops at subsidised rates that are not going to food production - hence the price of tortilla flour in Mexico has doubled and led to riots. The oil for cultivation especially is a no brainier - for every unit of oil cost to cultivate results in 0.6 of a unit of oil, whilst for sweet crude for every unit of oil cost to cultivate results in 30 units of oil - some bio's work on a ratio of 1:6. So basically with this pressure and the Chinese and Indians (massive growing economies) wanting to eat more beef (cows need wheat to eat) mean’s that worldwide inventories of all soft commodity stocks are historically low.
Therefore in the short to medium term unless we stop fooling with the bio-fuel argument and/or insist the Chinese and Indian stop eating western style foods then these prices are going to keep rising.
Hence agricultural land is a prime investment for hedges funds as it can be leveraged. Until hydrogen in cars and common utility use is taken seriously in about 2020 then this trend will unfortunately continue.
Yes - a super cycle is an upward trend that should continue for at least the next 10 to 15 years. I know, most would say you can not forecast beyond the next week for any market. But that is what many hedge funds are referring to as a super cycle and are buying large tracts of land in Argentina, Australia, America etc by the 10,000's of acres. Oil is a prime example of a super cycle because it is a diminishing resource, similarly land is being used to cultivate oil that is corn, rapeseed etc. This is also now being subsidised by the American government and the number of new corn extraction companies in America has gone through the roof. Therefore farmers in the Mid West of USA are producing oil crops at subsidised rates that are not going to food production - hence the price of tortilla flour in Mexico has doubled and led to riots. The oil for cultivation especially is a no brainier - for every unit of oil cost to cultivate results in 0.6 of a unit of oil, whilst for sweet crude for every unit of oil cost to cultivate results in 30 units of oil - some bio's work on a ratio of 1:6. So basically with this pressure and the Chinese and Indians (massive growing economies) wanting to eat more beef (cows need wheat to eat) mean’s that worldwide inventories of all soft commodity stocks are historically low.
Therefore in the short to medium term unless we stop fooling with the bio-fuel argument and/or insist the Chinese and Indian stop eating western style foods then these prices are going to keep rising.
Hence agricultural land is a prime investment for hedges funds as it can be leveraged. Until hydrogen in cars and common utility use is taken seriously in about 2020 then this trend will unfortunately continue.
Yes - a super cycle is an upward trend that should continue for at least the next 10 to 15 years. I know, most would say you can not forecast beyond the next week for any market. But that is what many hedge funds are referring to as a super cycle and are buying large tracts of land in Argentina, Australia, America etc by the 10,000's of acres. Oil is a prime example of a super cycle because it is a diminishing resource, similarly land is being used to cultivate oil that is corn, rapeseed etc. This is also now being subsidised by the American government and the number of new corn extraction companies in America has gone through the roof. Therefore farmers in the Mid West of USA are producing oil crops at subsidised rates that are not going to food production - hence the price of tortilla flour in Mexico has doubled and led to riots. The oil for cultivation especially is a no brainier - for every unit of oil cost to cultivate results in 0.6 of a unit of oil, whilst for sweet crude for every unit of oil cost to cultivate results in 30 units of oil - some bio's work on a ratio of 1:6. So basically with this pressure and the Chinese and Indians (massive growing economies) wanting to eat more beef (cows need wheat to eat) mean’s that worldwide inventories of all soft commodity stocks are historically low.
Therefore in the short to medium term unless we stop fooling with the bio-fuel argument and/or insist the Chinese and Indian stop eating western style foods then these prices are going to keep rising.
Hence agricultural land is a prime investment for hedges funds as it can be leveraged. Until hydrogen in cars and common utility use is taken seriously in about 2020 then this trend will unfortunately continue.
The price of farm land is set to go through the roof. It is the only foreseeable, property growth area in the States.
I have heard that one of the slickest city boys in London James Ferguson bought 29,000 acres in Argentina so it must be safe.
a serious killing will be made.
If it sounds too good to be true, then...
Very intresting, do you work in economic's?
My Dad is a farmer and is thinking of investing in land in Aregentina through the following company:
Anyone have any opinions on investing in agricultural land in Argentina?
And yes it would be a long way to go to spray the crops
As I manage my own portfolio - I watch all area's of investment world very closely and look out for markets with strong fundamentals in the early stages of growth.
MichaelDes,
Other than agricultural land in Argentina, are there any other countries that you would be looking at with a view to investment in commercial or residential property?
It claims to be administered by a reputa ble fund services company in Ireland but the min investemtn is $500,000 according to the website and with that size of investment there a re alot of funds around that are alot more established
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