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EamoS
Guest
Obviously, the main answer is good weather and a bumper crop.
But with food prices at record highs, and more recent weather events which should significantly affect harvest (e.g. Brazil and Australia), what's going to stop food prices from continuing to rise. Furthermore, from what I understand, certain crops are in effect, in competition, with each other for agricultural land space. So crops will be affected indirectly if farmers substitute land space in order to try and compensate for poor harvests in other crops.
Also, is it fair to say that inflation may also drive up prices? Are agri commodities another asset class that people would invest in to avoid their cash holdings losing value through inflation or reduced confidence in their currency. Or do investors tend to avoid such commodities like this that are driven almost solely by supply and demand which in turn are driven by factors hard to predict such as weather? My theory is that investors may favour agri commodities over precious metals such as Gold, which could be due for a correction and no longer a safe haven.
Any help with this would be greatly appreciated!
But with food prices at record highs, and more recent weather events which should significantly affect harvest (e.g. Brazil and Australia), what's going to stop food prices from continuing to rise. Furthermore, from what I understand, certain crops are in effect, in competition, with each other for agricultural land space. So crops will be affected indirectly if farmers substitute land space in order to try and compensate for poor harvests in other crops.
Also, is it fair to say that inflation may also drive up prices? Are agri commodities another asset class that people would invest in to avoid their cash holdings losing value through inflation or reduced confidence in their currency. Or do investors tend to avoid such commodities like this that are driven almost solely by supply and demand which in turn are driven by factors hard to predict such as weather? My theory is that investors may favour agri commodities over precious metals such as Gold, which could be due for a correction and no longer a safe haven.
Any help with this would be greatly appreciated!