The Illinois farmland investment market rings up another record this year as a plot of land sold for $13,500 per acre.
The transaction was made on June 3, just eight days after setting a record of $12,900 per acre. Both sales were in Champaign County.
Last fall, an area of farmland was sold in Iowa for $13,950 an acre.
Economist say farmland is a hot investment in the market right now because of its stability.
DGC Asset Management Limited provide Investors with the opportunity to engage in strategic mid term and long term asset-backed investments within the Agricultural, Timber and Renewable Energy sectors.
Showing posts with label farm land investment. Show all posts
Showing posts with label farm land investment. Show all posts
Friday, 17 June 2011
Is a Arkansas Farmland Investment Boom Coming?
In news from Arkansas, demand for farmland there has spiked dramatically since a year ago. While other investment vehicles still remain stagnant, rising grain prices have rocketed farmers into acquisition mode.
Commodity prices and farmer profits have spurred what may be called a sort of Arkansas land bonanza of late. Profits are being directly re-invested into buying more farmland, while interest rates make such purchases even more desirable. Now investors other than farmers are seeing benefit as well, which is only making the demand rise too. Lee Vermeer, AFM, Vice President of Real Estate Operations at Farmers National Company, had this to say about the situation:
“While 75 to 85 percent of land buyers continue to be farmers, interest among outside investors has risen. Despite the robust demand driving sales activity levels, reports show that lenders are taking a relatively conservative approach to lending. Strong profits the past few years have provided cash for farmer buyers, while investors are taking cash from other sources to rebalance portfolios.”
Land prices are rising in other areas of the country as well. Flooding and other factors, combined with the growing demand for certain crops, has made farmland investment a viable alternative even for commercial investors. Tennessee, Mississippi, Arkansas, Alabama, western Kentucky, Louisiana, and southern Missouri are all seeing the same kind of price increases as Arkansas.
Monty Meusch, an expert from Farmers National Company, reported on land prices in Iowa, Kansas, Missouri, Nebraska, and South Dakota recently, showing cases where prices far exceeded expectations in recent land auctions. And while not much is mentioned about prices tied to high tech alternative fuels, food shortages, and similar market drivers, it seems clear farm land will see sustained price and demand stimulation.
The Watt reports 2011 seeing a 20 % rise in demand for biofuels, and already Brazil is on the verge of severe constraints where the ethanol industry there is concerned. Land may soon come at a bigger premium than any other real estate commodity.
Arkansas and other agriculturally grounded states may be the first to see farmland prices spike, but as the demand for farm products grows, farmers everywhere will clearly rich in cash to invest elsewhere. Georgia, South Carolina, North Carolina, and others of the Southern states once abundantly agricultural, may well see a resurgence with the need for biofuels and more argi-business.
But like all markets, farm land is also tied to so many other crucial sectors – in short, good news for some generally means higher prices and constraints for others. We will follow how these economies affect Arkansas’ other real estate sectors.
Source: http://realtybiznews.com/arkansas-land-boom/9873448/
Commodity prices and farmer profits have spurred what may be called a sort of Arkansas land bonanza of late. Profits are being directly re-invested into buying more farmland, while interest rates make such purchases even more desirable. Now investors other than farmers are seeing benefit as well, which is only making the demand rise too. Lee Vermeer, AFM, Vice President of Real Estate Operations at Farmers National Company, had this to say about the situation:
“While 75 to 85 percent of land buyers continue to be farmers, interest among outside investors has risen. Despite the robust demand driving sales activity levels, reports show that lenders are taking a relatively conservative approach to lending. Strong profits the past few years have provided cash for farmer buyers, while investors are taking cash from other sources to rebalance portfolios.”
Land prices are rising in other areas of the country as well. Flooding and other factors, combined with the growing demand for certain crops, has made farmland investment a viable alternative even for commercial investors. Tennessee, Mississippi, Arkansas, Alabama, western Kentucky, Louisiana, and southern Missouri are all seeing the same kind of price increases as Arkansas.
Monty Meusch, an expert from Farmers National Company, reported on land prices in Iowa, Kansas, Missouri, Nebraska, and South Dakota recently, showing cases where prices far exceeded expectations in recent land auctions. And while not much is mentioned about prices tied to high tech alternative fuels, food shortages, and similar market drivers, it seems clear farm land will see sustained price and demand stimulation.
The Watt reports 2011 seeing a 20 % rise in demand for biofuels, and already Brazil is on the verge of severe constraints where the ethanol industry there is concerned. Land may soon come at a bigger premium than any other real estate commodity.
Arkansas and other agriculturally grounded states may be the first to see farmland prices spike, but as the demand for farm products grows, farmers everywhere will clearly rich in cash to invest elsewhere. Georgia, South Carolina, North Carolina, and others of the Southern states once abundantly agricultural, may well see a resurgence with the need for biofuels and more argi-business.
But like all markets, farm land is also tied to so many other crucial sectors – in short, good news for some generally means higher prices and constraints for others. We will follow how these economies affect Arkansas’ other real estate sectors.
Source: http://realtybiznews.com/arkansas-land-boom/9873448/
Largest Ever Farmland Investment For Sale
Savills has been instructed to sell close to 1 million acres of land in Argentina. Situated in the San Juan province in the north west of Argentina, Estancia Punta del Agua totals approximately 989,000 acres in a single location to the north west of San Juan city.
The land is being marketed through Savills and joint agents Gateway to South America based in Buenos Aires, on behalf of a multi-national family who have owned the land since the 1980’s and now wish to concentrate on other projects.
Ken Jones, head of international farmland for Savills says “This is probably the largest ring fenced freehold block of land to be offered for sale in the open market ever. Given the current interest in farmland from international investors, we expect the Estancia to appeal to a number of potential purchasers. With soil reports showing vast areas of silt soils, and the potential of tapping into one of the largest aquifers in Argentina, the Estancia needs an investor who understands agriculture and has the capital to invest after the purchase in a scheme of works to bring the land into line with 21st century farming techniques. We feel, once implemented, not only will the owner have one of the largest farms in the world, but also will have added value far beyond the cost of the scheme.”
Joint agent Geoffrey McRae of Gateway to South America adds; “The Estancia was a productive farming estate until the 1950’s when lack of infrastructure meant that the province of San Juan became less competitive in comparison to the more strategically located provinces like Mendoza and La Pampa. In recent years, a strategic alliance between the countries of Chile, Argentina, Uruguay and Brazil has meant significant investment in, amongst others, a road network connecting major ports on the Atlantic and Pacific oceans. Part of this network of road runs the full width of the Estancia meaning produce can be transported from the land with ease. Investment in the 132kv grid network means that the Estancia will also benefit from a modern, reliable electricity supply.”
The Estancia totals approximately 989,000 acres and is available as a whole by Private Treaty.
Source: http://www.landgazette.co.uk/index.php/rural-agency-/935-largest-block
The land is being marketed through Savills and joint agents Gateway to South America based in Buenos Aires, on behalf of a multi-national family who have owned the land since the 1980’s and now wish to concentrate on other projects.
Ken Jones, head of international farmland for Savills says “This is probably the largest ring fenced freehold block of land to be offered for sale in the open market ever. Given the current interest in farmland from international investors, we expect the Estancia to appeal to a number of potential purchasers. With soil reports showing vast areas of silt soils, and the potential of tapping into one of the largest aquifers in Argentina, the Estancia needs an investor who understands agriculture and has the capital to invest after the purchase in a scheme of works to bring the land into line with 21st century farming techniques. We feel, once implemented, not only will the owner have one of the largest farms in the world, but also will have added value far beyond the cost of the scheme.”
Joint agent Geoffrey McRae of Gateway to South America adds; “The Estancia was a productive farming estate until the 1950’s when lack of infrastructure meant that the province of San Juan became less competitive in comparison to the more strategically located provinces like Mendoza and La Pampa. In recent years, a strategic alliance between the countries of Chile, Argentina, Uruguay and Brazil has meant significant investment in, amongst others, a road network connecting major ports on the Atlantic and Pacific oceans. Part of this network of road runs the full width of the Estancia meaning produce can be transported from the land with ease. Investment in the 132kv grid network means that the Estancia will also benefit from a modern, reliable electricity supply.”
The Estancia totals approximately 989,000 acres and is available as a whole by Private Treaty.
Source: http://www.landgazette.co.uk/index.php/rural-agency-/935-largest-block
Thursday, 16 June 2011
Farmland investment, the next big portfoilo allocation
Many investment professionals, including the legendary Jim Rogers, believe agriculture commodities are only in the early-to-middle innings of a major "super cycle" of increasing prices.
The argument for this is fairly simple. The number of people in the world is increasing, and projected to reach nearly 9.1 billion by 2050 according to the United Nations. Meanwhile, the amount of arable farmland has been decreasing.
Source: http://www.commodityonline.com/news/Farmland-investment-the-next-big-portfoilo-39990-2-1.html
In addition, as with many major trends in the world today, a large reason behind the rapid run-up in food prices is China's development. As investors we always want to be on the correct side of global macro trends, and whatever China needs or is buying lots of, we want to own as investments.
The question is what are the best ways for making money from the agricultural sector? One way is to invest directly into agriculture stocks such as farm equipment maker John Deere (DE), global seed giant Monsanto (MON) or fertilizer company Potash Corp of Saskatchewan (POT).
Another method is to invest in agricultural futures through Exchange Traded Funds (ETFs) such as AIGA on the London Stock Exchange or DBC in the US which tracks an entire basket of agricultural commodities including corn, soybeans, wheat, cotton, sugar, coffee, cattle and pigs. These commodities ETFs try to track the spot price of the various commodities they include.
The advantage of these stocks or ETFs is that they are easily trade-able by anyone who has an online brokerage account. The disadvantage, however, is that they are still financial instruments, and as such can fluctuate widely in price.
One option most individual investors tend to overlook is direct investment in farmland. In many ways, a farmland investment is more secure, stable and tangible then putting money into stocks.
Farmland allows investors to still benefit from the global trends in agriculture we have discussed, whilst providing much greater stability then agriculture stocks or commodities which can fluctuate wildly.
Just to take one example, in the last 20 years farmland in the United States has never had a down year according to the National Council of Real Estate Investment Fiduciaries (NCREIF) in the US demonstrates.
Not surprisingly, many large institutional investors have been investing heavily in farmland the last several years. For example TIAA-CREF, one of the largest pension funds in the world, has recently made a large move into farmland investing.
Prices for farmland in the West - particularly in Europe - have already moved up considerably, reaching as high £17,300 per hectare in the northwest of England to take just one example.
Whilst there are considerable advantages in terms of political stability to farmland investment in Europe or the US, the real opportunities for spectacular gains lie in emerging markets, especially in Africa, which holds 60% of the world's remaining arable land suitable for farming.
Whilst farmland investment has been dominated by larger institutions historically, in just the last two years a number of options have been developed for individuals. The most common is to pool a number of individual investors' capital together to purchase a large parcel of land, and then divide it into individual freehold parcels.
Farmland investments for individuals generally pay a regular yearly dividend from the sale of crops, and also provide the opportunity for long-term capital gains as farmland continues to increase in value.
We are now starting to see options starting as low as £1,950/hectare for high quality farmland in Africa, making it easily accessible by individuals and a great way to diversify.
There are, of course, risks with any investment, but by doing one's due-diligence and investing in the right structure with the right people and institution, farmland investment can be both safe and profitable for individual investors as well as large institutions.
The argument for this is fairly simple. The number of people in the world is increasing, and projected to reach nearly 9.1 billion by 2050 according to the United Nations. Meanwhile, the amount of arable farmland has been decreasing.
Source: http://www.commodityonline.com/news/Farmland-investment-the-next-big-portfoilo-39990-2-1.html
In addition, as with many major trends in the world today, a large reason behind the rapid run-up in food prices is China's development. As investors we always want to be on the correct side of global macro trends, and whatever China needs or is buying lots of, we want to own as investments.
The question is what are the best ways for making money from the agricultural sector? One way is to invest directly into agriculture stocks such as farm equipment maker John Deere (DE), global seed giant Monsanto (MON) or fertilizer company Potash Corp of Saskatchewan (POT).
Another method is to invest in agricultural futures through Exchange Traded Funds (ETFs) such as AIGA on the London Stock Exchange or DBC in the US which tracks an entire basket of agricultural commodities including corn, soybeans, wheat, cotton, sugar, coffee, cattle and pigs. These commodities ETFs try to track the spot price of the various commodities they include.
The advantage of these stocks or ETFs is that they are easily trade-able by anyone who has an online brokerage account. The disadvantage, however, is that they are still financial instruments, and as such can fluctuate widely in price.
One option most individual investors tend to overlook is direct investment in farmland. In many ways, a farmland investment is more secure, stable and tangible then putting money into stocks.
Farmland allows investors to still benefit from the global trends in agriculture we have discussed, whilst providing much greater stability then agriculture stocks or commodities which can fluctuate wildly.
Just to take one example, in the last 20 years farmland in the United States has never had a down year according to the National Council of Real Estate Investment Fiduciaries (NCREIF) in the US demonstrates.
Not surprisingly, many large institutional investors have been investing heavily in farmland the last several years. For example TIAA-CREF, one of the largest pension funds in the world, has recently made a large move into farmland investing.
Prices for farmland in the West - particularly in Europe - have already moved up considerably, reaching as high £17,300 per hectare in the northwest of England to take just one example.
Whilst there are considerable advantages in terms of political stability to farmland investment in Europe or the US, the real opportunities for spectacular gains lie in emerging markets, especially in Africa, which holds 60% of the world's remaining arable land suitable for farming.
Whilst farmland investment has been dominated by larger institutions historically, in just the last two years a number of options have been developed for individuals. The most common is to pool a number of individual investors' capital together to purchase a large parcel of land, and then divide it into individual freehold parcels.
Farmland investments for individuals generally pay a regular yearly dividend from the sale of crops, and also provide the opportunity for long-term capital gains as farmland continues to increase in value.
We are now starting to see options starting as low as £1,950/hectare for high quality farmland in Africa, making it easily accessible by individuals and a great way to diversify.
There are, of course, risks with any investment, but by doing one's due-diligence and investing in the right structure with the right people and institution, farmland investment can be both safe and profitable for individual investors as well as large institutions.
Why International Farmland Investments Can Be Perilous
In this age of global uncertainty in the area of food producing and wealth preservation, productive farmland around the world has been placed into the spotlight by "guru investors," wealth management funds, growing mega agri-industries, wealthy individuals, and especially, food insecure nations.
If ownership of the farmland of a nation doesn't define a nation, then what does, I ask? Why are the deals popular? The same reason any deal is popular. There is strong demand and there are willing suppliers. Opportunism, if you will.
Sovereign wealth funds hold about $4 trillion in assets globally, and many, are food challenged, such as Saudi Arabia, United Arab Emirates, Abu Dhabi, Qatar, South Korea, and China. They are actively seeking out foreign farmland. China is by far the largest investor, buying or leasing twice as much as anyone else.
Indeed, the subject of foreign ownership of farmland is so common today that it is difficult to keep up. A lack of transparency in many of the land deals makes it impossible to make very accurate assessments.
How much foreign farmland has been acquired in recent years?
It is estimated that the amount of global farmland that has been acquired by foreign entities equals about 198 million acres. There is $100 billion waiting to be invested by 120 investment groups. Food insecure nations such as the Gulf States, China, Japan, South Korea and Western Europe are all interested in increasing their farmland holdings.
What are the benefits for those who sell out?
Let's use the Canadian farmer as an example. Canada does not regulate foreign ownership of farmland, its provinces do. In Canada, an average farm debt burden of 23 dollars per dollar of net farm income entices farmers to sell the land in exchange for farming it and having an outside business pay for expensive inputs in return for some form of crop sharing.
Some poor nations see opportunities to benefit from infrastructure building of rail, roads and ports. Often, however, high levels of corruption are involved in the land deals with low levels of benefit. There is frequently a lack of follow-through.
How much investment is from the private investment sector?
According to Reuters, the amount of private capital in agricultural farmland worldwide is expected to more than double to around $5-$7 billion in the next couple of years from an estimated $2.5-$3 billion invested in the last couple of years. U.S.-based agriculture consultants HighQuest Partners estimates that the total value of investment funds in agriculture lands worldwide is $15-$20 billion.
The larger buyer categories are sovereign wealth funds and agri-businesses. Mega farms being developed in central and eastern Europe, for example, now equal the size of Denmark.
What ecological harm comes from foreign ownership of a nation's farmland?
Local farmland ownership promotes sustainable practices over corporate large-scale production practices, preserves local food systems and family farms, and helps to ensure food security for the locality as well as for the nation.
What are the political risks?
Any nation faced with civil disobedience or unrest, for whatever reason, might be subject to regime changes which might quickly change foreign land ownership policy. Argentina has recently threatened to reverse honoring foreign land holdings. This quickly becomes what wars are made of, should the right conditions exist.
Citizens unhappy with foreign ownership of farmland could result in toppled governments.
Every nation is (or will be) considering its policy regulating foreign ownership of farmland. Many with loose standards will be tightening them. Brazil and Argentina are limiting the size of land foreign enterprises can own. Brazil would like to see partnerships instead of land transfers.
Investors in Africa’s agriculture sector need to understand that land ownership there is complex, fraught with politcal, emotive, and survival issues.
Other political risks would include farm policy regulation changes including biofuels policies, chemical use, GMO use, land set-aside policies, and land practice management.
Over time, there is a poor history of successful attempts to farm across borders.
Is it true that there is no more farmland in the world to come into production?
There are large areas in Latin America, Africa, the Ukraine, and Eastern Europe which could come into production. In addition, the developing nations have the potential and desire to increase their own agricultural commodity production through efficiency gains.
What are the economic risks?
Contrary to prevailing wisdom, there is no guarantee that corporate farming or farming for investors will pay.
One risk affecting profit potential is that of increasing global competition. Latin America, BRIC, and other nations are setting up reciprocal trade agreements and increasing output through increased efficiency.
Farmers in the U.S., Canada, the E.U., and Japan all rely upon farm price supports while individual farmers have relied upon off-farm income to survive. Future farm policies will be affected by debt burdens in developed nations.
What are a few examples of global farmland deals?
The Saudi Kingdom is behind a seven year project of acquiring 1.7 million irrigated rice acres in Senegal and Mali, enough to produce 7 million tonnes of rice. Proposals would allow Saudi business groups to take control of 70% of the rice-growing area of Senegal. Saudi Arabia has farming interests in Egypt, Ethiopia, Tanzania, Syria, Turkey and the Ukraine.
South Koreans want to produce rice, corn, sugar, fish, and livestock in the Philippines.
Japan is believed to hold three times the amount of its own farmable land outside of its borders.
Argentina and Brazil have acquired land in Uruguay.
The Qatari government has leased large amounts of land in Kenya. They also have or are working on deals in Brazil, Argentina, Australia, Sudan, and the Ukraine.
Egypt leases land in Uganda to produce rice, wheat and beef.
Foreign firms have invested in dairies, meat processing, crops and others areas in Serbia and other non-European Union members of the Balkans.
The World Bank says that the 463 projects covering 116 million acres, mostly in sub-Saharan Africa were acquired in eight months during 2008-9.
Some of Australia's biggest companies in the food business have been taken over by foreign companies in recent years. Australia allows 99-year land leasing.
Nigeria is appealing to the Gulf nations to utilize its land. It has 175 million acres and is only farming half of that. It desires investment in that land, it desires employment opportunities, and it claims that it could provide 100% of the Gulf's food needs.
Chinese investment in Kazakhstan reached $5 billion by the end of last year, slightly less than 4 percent of the country's total foreign direct investment. They are buying land in Brazil for soybean cultivation, as part of a $3.4 billion plan to build oilseed and rice production bases overseas including bases for rapeseed in Canada and Australia, palm oil in Malaysia and rice in Cambodia.
Conclusion
As an investment idea, it is altogether possible that acquiring foreign farmland is a fad, and when balance sheets disappoint, exits will be taken, returning the land to the local communities.
As an agri-business decision, I expect this movement to continue and perhaps accelerate.
Foreign farmland deals as a solution for wealthy but food insecure nations may be successful in some regions. Future agricultural production will be stressed by climate change and competition for remaining oil and water supplies while population numbers grow. In more stressful times, expect these land deals to lead to unrest and lay the groundwork for wars and national boundary or ownership changes. Eventually, expect trade agreements of oil for food, too.
This piece originally appeared on The Big Picture Agriculture.
Read more: http://bigpictureagriculture.blogspot.com/2011/06/perils-of-international-farmland.html#ixzz1PRLfleBI
If ownership of the farmland of a nation doesn't define a nation, then what does, I ask? Why are the deals popular? The same reason any deal is popular. There is strong demand and there are willing suppliers. Opportunism, if you will.
Sovereign wealth funds hold about $4 trillion in assets globally, and many, are food challenged, such as Saudi Arabia, United Arab Emirates, Abu Dhabi, Qatar, South Korea, and China. They are actively seeking out foreign farmland. China is by far the largest investor, buying or leasing twice as much as anyone else.
Indeed, the subject of foreign ownership of farmland is so common today that it is difficult to keep up. A lack of transparency in many of the land deals makes it impossible to make very accurate assessments.
How much foreign farmland has been acquired in recent years?
It is estimated that the amount of global farmland that has been acquired by foreign entities equals about 198 million acres. There is $100 billion waiting to be invested by 120 investment groups. Food insecure nations such as the Gulf States, China, Japan, South Korea and Western Europe are all interested in increasing their farmland holdings.
What are the benefits for those who sell out?
Let's use the Canadian farmer as an example. Canada does not regulate foreign ownership of farmland, its provinces do. In Canada, an average farm debt burden of 23 dollars per dollar of net farm income entices farmers to sell the land in exchange for farming it and having an outside business pay for expensive inputs in return for some form of crop sharing.
Some poor nations see opportunities to benefit from infrastructure building of rail, roads and ports. Often, however, high levels of corruption are involved in the land deals with low levels of benefit. There is frequently a lack of follow-through.
How much investment is from the private investment sector?
According to Reuters, the amount of private capital in agricultural farmland worldwide is expected to more than double to around $5-$7 billion in the next couple of years from an estimated $2.5-$3 billion invested in the last couple of years. U.S.-based agriculture consultants HighQuest Partners estimates that the total value of investment funds in agriculture lands worldwide is $15-$20 billion.
The larger buyer categories are sovereign wealth funds and agri-businesses. Mega farms being developed in central and eastern Europe, for example, now equal the size of Denmark.
What ecological harm comes from foreign ownership of a nation's farmland?
Local farmland ownership promotes sustainable practices over corporate large-scale production practices, preserves local food systems and family farms, and helps to ensure food security for the locality as well as for the nation.
What are the political risks?
Any nation faced with civil disobedience or unrest, for whatever reason, might be subject to regime changes which might quickly change foreign land ownership policy. Argentina has recently threatened to reverse honoring foreign land holdings. This quickly becomes what wars are made of, should the right conditions exist.
Citizens unhappy with foreign ownership of farmland could result in toppled governments.
Every nation is (or will be) considering its policy regulating foreign ownership of farmland. Many with loose standards will be tightening them. Brazil and Argentina are limiting the size of land foreign enterprises can own. Brazil would like to see partnerships instead of land transfers.
Investors in Africa’s agriculture sector need to understand that land ownership there is complex, fraught with politcal, emotive, and survival issues.
Other political risks would include farm policy regulation changes including biofuels policies, chemical use, GMO use, land set-aside policies, and land practice management.
Over time, there is a poor history of successful attempts to farm across borders.
Is it true that there is no more farmland in the world to come into production?
There are large areas in Latin America, Africa, the Ukraine, and Eastern Europe which could come into production. In addition, the developing nations have the potential and desire to increase their own agricultural commodity production through efficiency gains.
What are the economic risks?
Contrary to prevailing wisdom, there is no guarantee that corporate farming or farming for investors will pay.
One risk affecting profit potential is that of increasing global competition. Latin America, BRIC, and other nations are setting up reciprocal trade agreements and increasing output through increased efficiency.
Farmers in the U.S., Canada, the E.U., and Japan all rely upon farm price supports while individual farmers have relied upon off-farm income to survive. Future farm policies will be affected by debt burdens in developed nations.
What are a few examples of global farmland deals?
The Saudi Kingdom is behind a seven year project of acquiring 1.7 million irrigated rice acres in Senegal and Mali, enough to produce 7 million tonnes of rice. Proposals would allow Saudi business groups to take control of 70% of the rice-growing area of Senegal. Saudi Arabia has farming interests in Egypt, Ethiopia, Tanzania, Syria, Turkey and the Ukraine.
South Koreans want to produce rice, corn, sugar, fish, and livestock in the Philippines.
Japan is believed to hold three times the amount of its own farmable land outside of its borders.
Argentina and Brazil have acquired land in Uruguay.
The Qatari government has leased large amounts of land in Kenya. They also have or are working on deals in Brazil, Argentina, Australia, Sudan, and the Ukraine.
Egypt leases land in Uganda to produce rice, wheat and beef.
Foreign firms have invested in dairies, meat processing, crops and others areas in Serbia and other non-European Union members of the Balkans.
The World Bank says that the 463 projects covering 116 million acres, mostly in sub-Saharan Africa were acquired in eight months during 2008-9.
Some of Australia's biggest companies in the food business have been taken over by foreign companies in recent years. Australia allows 99-year land leasing.
Nigeria is appealing to the Gulf nations to utilize its land. It has 175 million acres and is only farming half of that. It desires investment in that land, it desires employment opportunities, and it claims that it could provide 100% of the Gulf's food needs.
Chinese investment in Kazakhstan reached $5 billion by the end of last year, slightly less than 4 percent of the country's total foreign direct investment. They are buying land in Brazil for soybean cultivation, as part of a $3.4 billion plan to build oilseed and rice production bases overseas including bases for rapeseed in Canada and Australia, palm oil in Malaysia and rice in Cambodia.
Conclusion
As an investment idea, it is altogether possible that acquiring foreign farmland is a fad, and when balance sheets disappoint, exits will be taken, returning the land to the local communities.
As an agri-business decision, I expect this movement to continue and perhaps accelerate.
Foreign farmland deals as a solution for wealthy but food insecure nations may be successful in some regions. Future agricultural production will be stressed by climate change and competition for remaining oil and water supplies while population numbers grow. In more stressful times, expect these land deals to lead to unrest and lay the groundwork for wars and national boundary or ownership changes. Eventually, expect trade agreements of oil for food, too.
This piece originally appeared on The Big Picture Agriculture.
Read more: http://bigpictureagriculture.blogspot.com/2011/06/perils-of-international-farmland.html#ixzz1PRLfleBI
Friday, 10 June 2011
Uruguay Farmland Investment Tax Feared by Investors
The Uruguayan government is trying to decide how to implement a controversial new tax on land holdings involving approximately 60 million dollars per annum and which has exposed deep differences in the ruling coalition, is rejected by farmers and feared by investors.
President Jose Mujica last Monday during the cabinet meeting presented a fiscal proposal, elaborated with the head of the Planning Office which considers three main brackets: over 2.000 hectares, 8 US dollars per hectare; over 5.000 hectares, 12 USD per hectare and over 10.000 hectares, 16 USD.
However Vice-president Danilo Astori, Economy Minister Fernando Lorenzo, Agriculture minister Tabare Aguerre and Public Works and Transport minister Enrique Pintado are proposing a tax linked to the production and profitability of farma, not its size, and taking advantage of the already existent mechanism.
Furthermore Astori, a former Economy minister feels that the tax proposed by President Mujica could have negative effects for farming and investors, besides the fact it means ‘changing the rules of the game’ even when the sums involved are minimum.
“As the scheme was presented it could have an impact on the value of land and the high productivity rates Uruguay has experienced in its farming sector, so we believe an alternative must be worked out” said Astori.
“The sixty million dollars is not much money for the government but the problem is that an unexpected change can be suggesting that in the future there could be major changes and this can generate uncertainties, lack of predictability which means risks in the horizon for investors and could have a negative impact on investment decisions; that is what worries me”, underlined Astori.
Asked if he supported the initiative from Mujica and his Planning Office minister Gabriel Frugoni, Astori replied that “I would like to see if we can have or come up with improved alternatives; I think we have them”.
He added that what really concerns is the fact the current fiscal system for the farming sector is based on taxing income and “now we are moving to a proposal that would tax land holdings”.
“I think we are running into a contradiction, if we change the rules of the game. Of course I agree with the purpose of the tax revenue, improved roads, infrastructure, communications in the camp; we need them camp production has been growing sustainedly for the last decade”, said Vice-president Astori.
Another factor to take into account is that the results of a camp census will be known after the third quarter and “I agree with Agriculture minister Aguerre that we should have that information before moving ahead. But I also believe we can’t have an open discussion on taxes during months”, pointed out Astori.
The different farmers’ organizations are not unanimous about the overall initiative. The more combative Rural Federation simply said “enough with taxes”.
“To imagine Uruguay with more taxes, be it the camp or the city, simply makes unviable any production. The gap between tax burden and delivery in Uruguay is too wide”, said Miguel Sanguinetti, president of the federation.
However the more conservative Rural Association (ARU), cooperatives and the dairy sector preferred to wait and see “the definitive proposal from the government”, before making any statements.
ARU president Jose Bonica said that the infrastructure problem is “serious” and farmers are willing to consider the proposals and how they are implemented and with the sufficient transparency that those funds don’t end paying other bills. Nevertheless the farming sector is satisfied with the 2007 tax reform which is based on income and profits.
“The best tax is income tax. This makes sense, is fair and balanced, we all pay under the same rules, sometimes more, sometimes less but always according to income”, said Bonica.
The farm leader admitted that rural activities have multiplied, incomes have soared, “but costs have also soared”. Yes, there is a strong international demand, “virtually all that is produced in the camp is sold and at good prices, but we must not forget that inputs and costs have also closed the gap”.
Astori and ministers Lorenzo, Aguerre and Pintado have promised to come up with an alternative on time for the next Monday cabinet meeting.
Source: http://en.mercopress.com/2011/06/09/uruguayan-government-divided-over-implementation-of-a-new-tax-on-farmland
President Jose Mujica last Monday during the cabinet meeting presented a fiscal proposal, elaborated with the head of the Planning Office which considers three main brackets: over 2.000 hectares, 8 US dollars per hectare; over 5.000 hectares, 12 USD per hectare and over 10.000 hectares, 16 USD.
However Vice-president Danilo Astori, Economy Minister Fernando Lorenzo, Agriculture minister Tabare Aguerre and Public Works and Transport minister Enrique Pintado are proposing a tax linked to the production and profitability of farma, not its size, and taking advantage of the already existent mechanism.
Furthermore Astori, a former Economy minister feels that the tax proposed by President Mujica could have negative effects for farming and investors, besides the fact it means ‘changing the rules of the game’ even when the sums involved are minimum.
“As the scheme was presented it could have an impact on the value of land and the high productivity rates Uruguay has experienced in its farming sector, so we believe an alternative must be worked out” said Astori.
“The sixty million dollars is not much money for the government but the problem is that an unexpected change can be suggesting that in the future there could be major changes and this can generate uncertainties, lack of predictability which means risks in the horizon for investors and could have a negative impact on investment decisions; that is what worries me”, underlined Astori.
Asked if he supported the initiative from Mujica and his Planning Office minister Gabriel Frugoni, Astori replied that “I would like to see if we can have or come up with improved alternatives; I think we have them”.
He added that what really concerns is the fact the current fiscal system for the farming sector is based on taxing income and “now we are moving to a proposal that would tax land holdings”.
“I think we are running into a contradiction, if we change the rules of the game. Of course I agree with the purpose of the tax revenue, improved roads, infrastructure, communications in the camp; we need them camp production has been growing sustainedly for the last decade”, said Vice-president Astori.
Another factor to take into account is that the results of a camp census will be known after the third quarter and “I agree with Agriculture minister Aguerre that we should have that information before moving ahead. But I also believe we can’t have an open discussion on taxes during months”, pointed out Astori.
The different farmers’ organizations are not unanimous about the overall initiative. The more combative Rural Federation simply said “enough with taxes”.
“To imagine Uruguay with more taxes, be it the camp or the city, simply makes unviable any production. The gap between tax burden and delivery in Uruguay is too wide”, said Miguel Sanguinetti, president of the federation.
However the more conservative Rural Association (ARU), cooperatives and the dairy sector preferred to wait and see “the definitive proposal from the government”, before making any statements.
ARU president Jose Bonica said that the infrastructure problem is “serious” and farmers are willing to consider the proposals and how they are implemented and with the sufficient transparency that those funds don’t end paying other bills. Nevertheless the farming sector is satisfied with the 2007 tax reform which is based on income and profits.
“The best tax is income tax. This makes sense, is fair and balanced, we all pay under the same rules, sometimes more, sometimes less but always according to income”, said Bonica.
The farm leader admitted that rural activities have multiplied, incomes have soared, “but costs have also soared”. Yes, there is a strong international demand, “virtually all that is produced in the camp is sold and at good prices, but we must not forget that inputs and costs have also closed the gap”.
Astori and ministers Lorenzo, Aguerre and Pintado have promised to come up with an alternative on time for the next Monday cabinet meeting.
Source: http://en.mercopress.com/2011/06/09/uruguayan-government-divided-over-implementation-of-a-new-tax-on-farmland
Wednesday, 8 June 2011
Western Australia Plants out 5 Million Hectares of Wheat - Great news for Farmland Investment
Australia's top grain growing state may be on for a near-record canola crop despite the oilseed, like barley's, being downgraded in sowing plans by a stampede for wheat.
Growers in Western Australia, which typically provides roughly 40% of the national wheat harvest, have planted a record 5.4m hectares with the grain, a 10% rise year on year, Australia & New Zealand Bank said.
The increase has come largely at the expense of barley and canola, although growers, encouraged by high prices, have also brought marginal land into production, lifting overall sowings by some 300,000 hectares to 8m hectares.
Barley seedings have dropped to a five-year low of 1.1m hectares, with canola area down some 17% at 1.0m hectares.
Weak prospects
Nonetheless, this figure remains higher than historical levels and - assuming a trend yield of 1.0 tonnes per hectare, which the state fell short of last year because of drought - production should reach 1.07m tonnes, ANZ said.
The current record was set in 2008-09, at 1.18m tonnes.
A big crop of the rapeseed variant would be a welcome boost given setbacks to crops elsewhere, with a wet spring holding back output in Canada, the top canola exporter.
Canada's farm ministry overnight cut by 600,000 tonnes, to 12.7m tonnes, its estimate for domestic production.
Meanwhile, hopes for the rapeseed harvest in Germany, the European Union's biggest producer, have been dented by a dearth of rain.
Oil World, the influential oilseeds analysis group, last week cut to 4.65m tonnes its forecast for the harvest, representing a fall of more than 1m tonnes from last year's result, while German co-operatives have estimated the crop at 4.4m tonnes.
The US Department of Agriculture foresees world rapeseed production, including canola, falling behind consumption in 2011-12 for a second successive season.
Into the red
The cut by Australian growers in canola seedings this year is in part down to weather, with a dry start to autumn persuading many farmers to delay sowings.
"Farmers that chose to wait for rain before sowing would have had to wait until mid-May. At that point, it was quite late to be sowing canola, and most farmers would have opted to sow wheat," ANZ said.
However, it also reflects the higher costs, in fertilizer and pesticide terms, of growing canola, which do not look this season like being rewarded with greater profits.
Gross margins were, at about Aus$120 a tonne last season, roughly 50% higher than those for wheat. However, thanks to especially high wheat prices, those figures have now converged at about Aus$300 a tonne.
With farms in some areas of Western Australia losing Aus$500,000 each last season, because of the drought, "managing cash flows and debt levels for the 2011 cropping season has been a priority", ANZ said.
Source: Agrimoney.com
Growers in Western Australia, which typically provides roughly 40% of the national wheat harvest, have planted a record 5.4m hectares with the grain, a 10% rise year on year, Australia & New Zealand Bank said.
The increase has come largely at the expense of barley and canola, although growers, encouraged by high prices, have also brought marginal land into production, lifting overall sowings by some 300,000 hectares to 8m hectares.
Barley seedings have dropped to a five-year low of 1.1m hectares, with canola area down some 17% at 1.0m hectares.
Weak prospects
Nonetheless, this figure remains higher than historical levels and - assuming a trend yield of 1.0 tonnes per hectare, which the state fell short of last year because of drought - production should reach 1.07m tonnes, ANZ said.
The current record was set in 2008-09, at 1.18m tonnes.
A big crop of the rapeseed variant would be a welcome boost given setbacks to crops elsewhere, with a wet spring holding back output in Canada, the top canola exporter.
Canada's farm ministry overnight cut by 600,000 tonnes, to 12.7m tonnes, its estimate for domestic production.
Meanwhile, hopes for the rapeseed harvest in Germany, the European Union's biggest producer, have been dented by a dearth of rain.
Oil World, the influential oilseeds analysis group, last week cut to 4.65m tonnes its forecast for the harvest, representing a fall of more than 1m tonnes from last year's result, while German co-operatives have estimated the crop at 4.4m tonnes.
The US Department of Agriculture foresees world rapeseed production, including canola, falling behind consumption in 2011-12 for a second successive season.
Into the red
The cut by Australian growers in canola seedings this year is in part down to weather, with a dry start to autumn persuading many farmers to delay sowings.
"Farmers that chose to wait for rain before sowing would have had to wait until mid-May. At that point, it was quite late to be sowing canola, and most farmers would have opted to sow wheat," ANZ said.
However, it also reflects the higher costs, in fertilizer and pesticide terms, of growing canola, which do not look this season like being rewarded with greater profits.
Gross margins were, at about Aus$120 a tonne last season, roughly 50% higher than those for wheat. However, thanks to especially high wheat prices, those figures have now converged at about Aus$300 a tonne.
With farms in some areas of Western Australia losing Aus$500,000 each last season, because of the drought, "managing cash flows and debt levels for the 2011 cropping season has been a priority", ANZ said.
Source: Agrimoney.com
Foreign farmland investment in Western District Australia sparks support for tighter regulation
Independent Senator Nick Xenophon says the potential purchase of five properties in the Western District of Victoria by a Middle East agricultural company highlights the importance of tightening the laws on foreign investment
It has been reported that Qatar's Hassad Foods is set to purchase 8500 hectares of farmland in a deal worth $35 million.
Currently, the Foreign Investment Review Board only assesses purchases that exceed $230 million.
Senator Xenophon has introduced a Private Member's Bill which will require all purchases of agricultural land more than five hectares to be scrutinised by the FIRB.
"I don't know why we have such an extraordinarily high threshold here in Australia," he says.
Senator Xenophon says foreign countries are investing in Australia because they understand the importance of food security.
"It's going to become the big issue of the 21st century (and) we have been less than smart in our approach to this."
Victorian Farmers Federation President Andrew Broad agrees that tightening the regulation of foreign investment is crucial.
But he says a five hectare threshold would be too onerous to govern.
Mr Broad says investments that exceed $20 million should be investigated.
"It doesn't have to be onerous, I don't think the Foreign Investment Review Board should stop every transaction, it's just a matter of providing some oversight," he says.
"We need to be aware this is what's happening around the world and the Australia Government is going to be 10 years behind the mark and it will be too late."
Mr Broad says Australia is in a good position to increase food production capacity to meet rising global demand.
"But we are selling both the soil and chance to profit off it," he says.
"Id' rather sell them heaps and heaps of milk, heaps and heaps of wool and heaps and heaps of grain, than sell them the farm once and not be able to capitalise into perpetuity."
"There are a lot of people in Federal Government at the moment whose ears are shut to agriculture."
Senator Xenophon says the Bill is due to voted on later this year.
Soucre: http://www.abc.net.au/local/audio/2011/06/08/3238857.htm?site=ballarat
It has been reported that Qatar's Hassad Foods is set to purchase 8500 hectares of farmland in a deal worth $35 million.
Currently, the Foreign Investment Review Board only assesses purchases that exceed $230 million.
Senator Xenophon has introduced a Private Member's Bill which will require all purchases of agricultural land more than five hectares to be scrutinised by the FIRB.
"I don't know why we have such an extraordinarily high threshold here in Australia," he says.
Senator Xenophon says foreign countries are investing in Australia because they understand the importance of food security.
"It's going to become the big issue of the 21st century (and) we have been less than smart in our approach to this."
Victorian Farmers Federation President Andrew Broad agrees that tightening the regulation of foreign investment is crucial.
But he says a five hectare threshold would be too onerous to govern.
Mr Broad says investments that exceed $20 million should be investigated.
"It doesn't have to be onerous, I don't think the Foreign Investment Review Board should stop every transaction, it's just a matter of providing some oversight," he says.
"We need to be aware this is what's happening around the world and the Australia Government is going to be 10 years behind the mark and it will be too late."
Mr Broad says Australia is in a good position to increase food production capacity to meet rising global demand.
"But we are selling both the soil and chance to profit off it," he says.
"Id' rather sell them heaps and heaps of milk, heaps and heaps of wool and heaps and heaps of grain, than sell them the farm once and not be able to capitalise into perpetuity."
"There are a lot of people in Federal Government at the moment whose ears are shut to agriculture."
Senator Xenophon says the Bill is due to voted on later this year.
Soucre: http://www.abc.net.au/local/audio/2011/06/08/3238857.htm?site=ballarat
Saudi prince signs new Egypt farm land
Egypt settled one of a string of disputes over state land sales under deposed President Hosni Mubarak, revising the terms of a farmland deal with Saudi Prince Alwaleed bin Talal, the Egyptian government said on Tuesday.
The Saudi billionaire signed a new contract with the Egyptian government for land allocated to his Kingdom Agricultural Development Holding (KADCO), the cabinet said.
Land sale scandals have torn through Egypt's once booming housing sector and gathered pace after Mubarak's overthrow in a popular uprising.
Courts have scrapped land contracts for Egypt's two largest property developers, Talaat Moustafa Group and Palm Hills and two former government ministers have been sentenced to jail over graft in state land sales.
KADCO, part of Alwaleed's Kingdom Holding Co bought 100,000 feddans (420 million square meters) at Toshka in southern Egypt in 1998 as part of a project to irrigate reclaimed agricultural land near the Sudanese border.
Egypt's public prosecutor said in April that the sale violated the law and the Saudi company later agreed to give back 75,000 feddans, according to Egypt's government.
The new deal stipulates that the company will own 10,000 feddans while cultivating another 15,000 feddans that it would take ownership of at a later date, a government spokesman said in April.
Egyptian Prime Minister Essam Sharaf described the new deal as a sign the government intended to correct "mistakes" in investment and trade deals signed by previous governments, a cabinet statement said on Tuesday.
"This deal signing ... reflects the government's approach to encouraging Arab and foreign investments through amicable negotiation to reach satisfactory solutions for both parties that agree with the law," Mr. Sharaf said.
The government has said it was setting up a committee to settle problems surrounding investment contracts.
Source: http://english.alarabiya.net/articles/2011/06/08/152401.html
The Saudi billionaire signed a new contract with the Egyptian government for land allocated to his Kingdom Agricultural Development Holding (KADCO), the cabinet said.
Land sale scandals have torn through Egypt's once booming housing sector and gathered pace after Mubarak's overthrow in a popular uprising.
Courts have scrapped land contracts for Egypt's two largest property developers, Talaat Moustafa Group and Palm Hills and two former government ministers have been sentenced to jail over graft in state land sales.
KADCO, part of Alwaleed's Kingdom Holding Co bought 100,000 feddans (420 million square meters) at Toshka in southern Egypt in 1998 as part of a project to irrigate reclaimed agricultural land near the Sudanese border.
Egypt's public prosecutor said in April that the sale violated the law and the Saudi company later agreed to give back 75,000 feddans, according to Egypt's government.
The new deal stipulates that the company will own 10,000 feddans while cultivating another 15,000 feddans that it would take ownership of at a later date, a government spokesman said in April.
Egyptian Prime Minister Essam Sharaf described the new deal as a sign the government intended to correct "mistakes" in investment and trade deals signed by previous governments, a cabinet statement said on Tuesday.
"This deal signing ... reflects the government's approach to encouraging Arab and foreign investments through amicable negotiation to reach satisfactory solutions for both parties that agree with the law," Mr. Sharaf said.
The government has said it was setting up a committee to settle problems surrounding investment contracts.
Source: http://english.alarabiya.net/articles/2011/06/08/152401.html
Thursday, 2 June 2011
Agricultural Investment - China Struggles to Cultivate Enough Soy
Download your FREE Agricultural Investment and Farmland Investment Guide here
China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will fall by roughly 800,000 tonnes to 14.4m tonnes, US Department of Agriculture attaches in Beijing said.
The deeper cut than acknowledged in an official USDA estimate of a 14.8m-tonne harvest reflects the greater profits achieved in corn in 2010-11, at an average of $700 per hectare, than from soybeans, which earned farmers $500 a hectare.
"The difference has negative impacted some soybean planting decisions for 2011-12," the attaches said in a report.
In the important producing province of Heilongjiang sowings are expected to tumble by 10-20%, particularly in central areas "where weather and growing conditions provide farmers more choices for grain crops", the briefing said, quoting information from "industry sources".
In other provinces, soybeans are expected to lose out to cotton, for which national sowings are expected to increase by 6.6% to 5.4m hectares, the China Cotton Association said on Thursday. The estimated rise in cotton area is, nonetheless, smaller than a 9.8% rise forecast in January.
China's overall soybean area, on a harvested basis, was pegged at 8.5m hectares, 200,000 hectares lower than the current USDA estimate and the lowest since 1999.
The extent of the decline will exacerbate a production deficit in China, the world's top soybean consumer and importer.
Indeed, the attaches stuck by an estimate of 72.5m tonnes for soybean use in 2011-12, "due to increased use of oilseed byproducts in animal production, and higher vegetable oil consumption" as wealthier consumers eat more and better.
Consumption of all protein meals is expected to rise by 6% to 65.6m tonnes, fuelled by rising hog production, which has hit a three-year high.
However, the attaches declined to raise their forecast for China's soybean imports in 2011-12, standing by an estimate of 58.0m tonnes, of which 25.0m tonnes are expected to come from the US, and viewing the extra shortall being made up from inventories.
China's soybean imports are a matter of market sensitivity, given their scope, accounting for nearly 60% of total world buy-ins.
The country imported 5.4m tonnes of soybeans in May, sufficient to keep the country on track to meet a USDA forecast for 2010-11 lowered to 54.5m tonnes.
US shipments export sales and shipments in the latest week were, at 412,000 tonnes and 163,000 tonnes respectively, above the pace needed to meet USDA forecasts.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source'; Agrimoney.com
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source'; Agrimoney.com
Soros largest Position is in Farmland Investment
Download your FREE Agricultural Investment and Farmland Investment Guide here
Each quarter there is a great wastage of electrons when hedge funds file their 13F position statements.
It's a waste because half the sites linking to the reports don't understand what the SEC requires and the various ways the funds can reduce transparancy.
I'll leave that discussion to another post. Another problem is that most of the commenters are clueless when it comes to connecting investments listed in the reports to major economic and financial trends. When Soros Fund Management LLC released their positions a couple weeks ago most of the commentariat glommed onto the funds drastic reduction in the SPDR gold trust. There were maybe two dozen comments that pointed out the new names in the portfolio. There were a handful who made the connection between SFM's new largest position and the current commodity megatrend.
Back on April Fools Day we posted: "Farmland: "Investors pump $400m into Ukraine farming groups"; Soros-Backed Adecoagro Trades solidly Above IPO Price Despite Loss (AGRO)" as part of our almost obsessive attraction to farmland as an investment (links below).
Here's SFM's March 31, 2011 13F. At the bottom of the page we find Adecoagro, 27,158,693 shares worth $366,099,000. That is the fund's largest position, the second biggest being $302 mil. worth of InterOil (use the blog search box, symbol IOC, we have quite a few posts) and the SPDR S&P 500 ETF worth $278 mil.
It was also a new position.
Mr. Soros' has had an interest in Adecoagro through other entities for some time but for SFM it was brand new.
You'd think that Soros buying farmland as his largest position would have made headlines around the world.
It didn't.
One writer who did understand, Frank Byrt at TheStreet, put this story together:
5 Stocks to Bet on Farming, Like Soros Does
Billionaire investor George Soros has gone from gold bug to gaucho, as his hedge fund took a 23% stake in a South American farming conglomerate after dumping most gold holdings in the first quarter.
Soros' move underscores a growing trend among investors who are cutting back on gold and shifting into assets that can produce saleable products, such as farmland, and hence serve as an inflation hedge as well as a bet on the value of the land.
South America is the geographic hotspot for many of these companies due to its favorable growing climate, dearth of natural disasters, the availability of farmland and a minimal number of government restrictions on its ownership by foreigners.
And many companies there grow can grow sugar and corn which then have multiple uses for them depending on market conditions, either as human food, animal feed or to be converted into bio-fuels.
Other hedge funds recently joining Soros down on the farm are the $18.7 billion Van Eck Associates fund, which is the largest investor in Brasil Foods(BRFS), with a 1% stake, and D.E. Shaw & Co., which is the largest shareholder of Argentine farm conglomerate Cresud(CRESY) at just under 9% of its shares, according to Securities and Exchange Commission 13-F filings.
Renatto Barbieri, chief investment officer at Galtere Ltd., a New York-based private-equity firm that, among its many investments, runs a $1 billion agribusiness fund, said in an interview that "there is a global trend to be invested in, what we would call 'real assets,' and tangible assets in agriculture is very much a part of that basket."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Climateer Investing
Each quarter there is a great wastage of electrons when hedge funds file their 13F position statements.
It's a waste because half the sites linking to the reports don't understand what the SEC requires and the various ways the funds can reduce transparancy.
I'll leave that discussion to another post. Another problem is that most of the commenters are clueless when it comes to connecting investments listed in the reports to major economic and financial trends. When Soros Fund Management LLC released their positions a couple weeks ago most of the commentariat glommed onto the funds drastic reduction in the SPDR gold trust. There were maybe two dozen comments that pointed out the new names in the portfolio. There were a handful who made the connection between SFM's new largest position and the current commodity megatrend.
Back on April Fools Day we posted: "Farmland: "Investors pump $400m into Ukraine farming groups"; Soros-Backed Adecoagro Trades solidly Above IPO Price Despite Loss (AGRO)" as part of our almost obsessive attraction to farmland as an investment (links below).
Here's SFM's March 31, 2011 13F. At the bottom of the page we find Adecoagro, 27,158,693 shares worth $366,099,000. That is the fund's largest position, the second biggest being $302 mil. worth of InterOil (use the blog search box, symbol IOC, we have quite a few posts) and the SPDR S&P 500 ETF worth $278 mil.
It was also a new position.
Mr. Soros' has had an interest in Adecoagro through other entities for some time but for SFM it was brand new.
You'd think that Soros buying farmland as his largest position would have made headlines around the world.
It didn't.
One writer who did understand, Frank Byrt at TheStreet, put this story together:
5 Stocks to Bet on Farming, Like Soros Does
Billionaire investor George Soros has gone from gold bug to gaucho, as his hedge fund took a 23% stake in a South American farming conglomerate after dumping most gold holdings in the first quarter.
Soros' move underscores a growing trend among investors who are cutting back on gold and shifting into assets that can produce saleable products, such as farmland, and hence serve as an inflation hedge as well as a bet on the value of the land.
South America is the geographic hotspot for many of these companies due to its favorable growing climate, dearth of natural disasters, the availability of farmland and a minimal number of government restrictions on its ownership by foreigners.
And many companies there grow can grow sugar and corn which then have multiple uses for them depending on market conditions, either as human food, animal feed or to be converted into bio-fuels.
Other hedge funds recently joining Soros down on the farm are the $18.7 billion Van Eck Associates fund, which is the largest investor in Brasil Foods(BRFS), with a 1% stake, and D.E. Shaw & Co., which is the largest shareholder of Argentine farm conglomerate Cresud(CRESY) at just under 9% of its shares, according to Securities and Exchange Commission 13-F filings.
Renatto Barbieri, chief investment officer at Galtere Ltd., a New York-based private-equity firm that, among its many investments, runs a $1 billion agribusiness fund, said in an interview that "there is a global trend to be invested in, what we would call 'real assets,' and tangible assets in agriculture is very much a part of that basket."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Climateer Investing
Ukraine bars foreigners from '$30bn' farmland sale
Download your FREE Agricultural Investment and Farmland Investment Guide here
Ukraine has ditched proposals to allow foreigners to buy up its farmland in a privatisation process, to prevent wealthy multinationals snapping up its farmland on the cheap.
Mykola Prysyazhnyuk, the Ukrainian farm minister, confirmed plans next year to lift a ban on the sale of farmland which has been in place since 1996.
However, "at the first stage, we will only be introducing the land market for Ukrainian nationals", Mr Prysyazhnyuk told the RIA Novosti news agency, saying such curbs would prevent the mass acquisition of Ukrainian land by foreign companies.
"We understand that if we make the market free, then $30bn will be enough - and that's not a lot for world financial corporations - to buy up all of our land," he said.
Yulia Tymoshenko, the former Russian prime minister, has estimated the cost of Ukrainian farmland at $400bn.
Transition period?
The limitation and dashes hopes raised early this year by Mykola Azarov, Ukraine's prime minister, that foreigners might be allowed investment opportunities, to encourage the investment needed to realise the country's agricultural potential.
Volodymyr Lytvyn, the chairman of Ukraine's parliament, held out the prospect of foreigners being banned from buying farmland only for an intermediary period, until local prices catch up with those abroad.
"The period of time should be designated when foreigners are prohibited from buying land," he said.
"There should be a transition period until the level of land prices in this country is equal to the land price in European countries."
Backlash
However, foreign ownership of land has become increasingly controversial, not only in Ukraine, where politicians only narrowly in March passed the privatisation plans, but abroad too.
A report from Oxfam, the anti-hunger charity, on Tuesday accused investors of "acquiring land in much larger quantities than they could possibly use", potentially just to tap into potential capital gains and exploit favourable borrowing conditions.
"The most comprehensive research to date suggests that 80% of projects reported in the media are undeveloped, and only 20% had begun actual farming," Oxfam said.
A conference in the UK-based Institute of Development Studies in April heard of growing evidence that foreign land investments in poor countries have failed to deliver on promises of benefits such as jobs and community development.
Black earth
Ukraine is viewed as, potentially, a particularly attractive destination for agricultural investment, possessing rich farmland which once earned it the title of "breadbasket of the Soviet Union", reportedly responsible for one-quarter of the bloc's food production.
Agriculture companies, such as London-listed Landkom International, which have built up significant land holdings have done so through leases.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
Wednesday, 1 June 2011
Farmland in Northern Ireland Fetched £16k per Acre
Download your FREE Agricultural Investment and Farmland Investment Guide here
ANOTHER land disposal this week by Best Property Services has offered further evidence that farm land is well and truly ‘bucking the trend’ of the general property downturn in NI.
This week, auctioneer Garry Best successful concluded the sale of a 32.5 acre farm by auction and achieved an unprecedented (in current times) £16k per acre at a final price of £520,000.
Mr Best commenced the proceedings on Thursday morning in their Hill Street Auction room where 20 parties’ attended, including seven active bidders which reduced to two at the closing stages.
The lands on Crewmore Road, Poyntzpass - near to the site of the old Taniokey School House - had no dwellings and were sold as agricultural lands only and had been let in conacre in recent years. Offered as one or separate lots, the farm sold in its entirety to one local bidder.
While previous sales of good quality lands had commanded good interest, Mr Best says this is a significant sale.
“The guide price suggested was in the region of £315,000 given other sales in this locality, so to exceed that by 65% to achieve £16,000 per acre has given the vendors, who reside in Bangor, a bonus they had not been expecting.”
Over the past decade, farmland in Northern Ireland has shown similar price trends as residential and commercial property - rising to a peak in 2007 and subsequently reducing, however Best Property Services recently indicated that this trend was levelling off for farmland.
Whilst there is still a wide variance in price between poor quality land in a remote rural location, compared to top quality land close to a main route (varying from £2,500 per acre to £12,000 per acre) this week’s Crewmore Road sale has shown that the limited supply of quality farm land will attract strong bidding when the rare opportunity to purchase arises.
“In the last six months, two good quality, well-located 80-acre farms were sold within County Armagh and these fetched around £11,000/acre (non-residential) and close to £14,500/acre for the second farm which included a good habitable farmhouse. Today’s sale heralds a new chapter as it was agricultural land with no dwellings but interest in it was so significant it pushed the upper limit to £16k per acre.”
During the past 12 months, Best Property Services have noted an increase in interest for the 50-70 acre size holding from business people and those actively involved in farming, often driven by the relative stability of farm land as an investment and shelter from inheritance tax.
Mr Best says: “While some of these potential buyers may have sold off building sites in better times, or lost land to new roads or development, the evidence would suggest that money is readily available to acquire good quality, well located land and certainly today’s events provide evidence to support that proposition.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Farming Life
ANOTHER land disposal this week by Best Property Services has offered further evidence that farm land is well and truly ‘bucking the trend’ of the general property downturn in NI.
This week, auctioneer Garry Best successful concluded the sale of a 32.5 acre farm by auction and achieved an unprecedented (in current times) £16k per acre at a final price of £520,000.
Mr Best commenced the proceedings on Thursday morning in their Hill Street Auction room where 20 parties’ attended, including seven active bidders which reduced to two at the closing stages.
The lands on Crewmore Road, Poyntzpass - near to the site of the old Taniokey School House - had no dwellings and were sold as agricultural lands only and had been let in conacre in recent years. Offered as one or separate lots, the farm sold in its entirety to one local bidder.
While previous sales of good quality lands had commanded good interest, Mr Best says this is a significant sale.
“The guide price suggested was in the region of £315,000 given other sales in this locality, so to exceed that by 65% to achieve £16,000 per acre has given the vendors, who reside in Bangor, a bonus they had not been expecting.”
Over the past decade, farmland in Northern Ireland has shown similar price trends as residential and commercial property - rising to a peak in 2007 and subsequently reducing, however Best Property Services recently indicated that this trend was levelling off for farmland.
Whilst there is still a wide variance in price between poor quality land in a remote rural location, compared to top quality land close to a main route (varying from £2,500 per acre to £12,000 per acre) this week’s Crewmore Road sale has shown that the limited supply of quality farm land will attract strong bidding when the rare opportunity to purchase arises.
“In the last six months, two good quality, well-located 80-acre farms were sold within County Armagh and these fetched around £11,000/acre (non-residential) and close to £14,500/acre for the second farm which included a good habitable farmhouse. Today’s sale heralds a new chapter as it was agricultural land with no dwellings but interest in it was so significant it pushed the upper limit to £16k per acre.”
During the past 12 months, Best Property Services have noted an increase in interest for the 50-70 acre size holding from business people and those actively involved in farming, often driven by the relative stability of farm land as an investment and shelter from inheritance tax.
Mr Best says: “While some of these potential buyers may have sold off building sites in better times, or lost land to new roads or development, the evidence would suggest that money is readily available to acquire good quality, well located land and certainly today’s events provide evidence to support that proposition.”
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Source: Farming Life
Thursday, 26 May 2011
UK wheat supplies cut to 'tightest in modern era'
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UK officials have bowed to the bumper pace of exports and forecast that the country's wheat supplies will end next month at their tightest "in the modern era" – although some believe even this revision may not be the last.
The Home Grown Cereals Authority cut by 91,000 tonnes, to 1.51m tonnes, its estimate for wheat stocks in the European Union's third largest grower of the grain at the close of the 2010-11 crop year.
"This creates the lowest stocks-to-usage ratio since 1997-98," the HGCA said, with the data implying inventories finishing 2010-11 at the equivalent of 10.9% of domestic consumption, or less than six weeks of use.
Michael Archer, the HGCA's senior cereals and oilseeds analyst, told Agrimoney.com that given the different structure of the UK wheat market now and that 13 years ago – which had yet to see changes such as the reform of the EU's common agricultural policy and the widespread use of futures – the figure could be seen as the "lowest we have had in the modern era".
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Ensus effect
The stocks revision reflected lower expectations for imports, which were downgraded by 33,000 tonnes to 1.05m tonnes, and a higher figure for exports, hiked by 335,900 tonnes to 2.44m tonnes - a rise of one-third year on year.
UK wheat has found fresh demand, including its first shipments to Turkey, as buyers denied supplies by Russian and Ukrainian export curbs sought replacement sources, and as France bought in feed grain to replace its own wheat which, even of lower quality, has been finding export orders for food use.
This more than offset the impact of a 108,000-tonne cut to food and industrial consumption of wheat, reflecting the mothballing of the Ensus wheat bioethanol plant in northern England, which is due to shut down over the next few days because of the margin squeeze caused by high grain costs.
However, even the revised stocks estimate may not be low enough, some observers believe, given that exports have reached 2.34m tonnes with three months of the crop year left to go.
"I can see them tailing off, but not that quickly," one trader told Agrimoney.com.
"I can see stocks ending tighter yet."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Stacking up the data
Mr Archer said that the export estimate indeed reflected an assessment that shipments would tail off sharply.
"If they are stronger, it makes the figures difficult to add up," he said.
"It implies higher imports, which we do not expect, or weaker domestic use, which we do not expect, or even lower stocks, which it is difficult to see realistically occurring."
London's old crop July wheat contract stood 1.0% higher at £194.00 a tonne in late deals on an upbeat day for world grains, with Chicago wheat gaining more than 2%, and Minneapolis spring wheat jumping 3%.
London's beter-traded November contract stood 1.1% higher at £193.50 a tonne.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
UK officials have bowed to the bumper pace of exports and forecast that the country's wheat supplies will end next month at their tightest "in the modern era" – although some believe even this revision may not be the last.
The Home Grown Cereals Authority cut by 91,000 tonnes, to 1.51m tonnes, its estimate for wheat stocks in the European Union's third largest grower of the grain at the close of the 2010-11 crop year.
"This creates the lowest stocks-to-usage ratio since 1997-98," the HGCA said, with the data implying inventories finishing 2010-11 at the equivalent of 10.9% of domestic consumption, or less than six weeks of use.
Michael Archer, the HGCA's senior cereals and oilseeds analyst, told Agrimoney.com that given the different structure of the UK wheat market now and that 13 years ago – which had yet to see changes such as the reform of the EU's common agricultural policy and the widespread use of futures – the figure could be seen as the "lowest we have had in the modern era".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Ensus effect
The stocks revision reflected lower expectations for imports, which were downgraded by 33,000 tonnes to 1.05m tonnes, and a higher figure for exports, hiked by 335,900 tonnes to 2.44m tonnes - a rise of one-third year on year.
UK wheat has found fresh demand, including its first shipments to Turkey, as buyers denied supplies by Russian and Ukrainian export curbs sought replacement sources, and as France bought in feed grain to replace its own wheat which, even of lower quality, has been finding export orders for food use.
This more than offset the impact of a 108,000-tonne cut to food and industrial consumption of wheat, reflecting the mothballing of the Ensus wheat bioethanol plant in northern England, which is due to shut down over the next few days because of the margin squeeze caused by high grain costs.
However, even the revised stocks estimate may not be low enough, some observers believe, given that exports have reached 2.34m tonnes with three months of the crop year left to go.
"I can see them tailing off, but not that quickly," one trader told Agrimoney.com.
"I can see stocks ending tighter yet."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Stacking up the data
Mr Archer said that the export estimate indeed reflected an assessment that shipments would tail off sharply.
"If they are stronger, it makes the figures difficult to add up," he said.
"It implies higher imports, which we do not expect, or weaker domestic use, which we do not expect, or even lower stocks, which it is difficult to see realistically occurring."
London's old crop July wheat contract stood 1.0% higher at £194.00 a tonne in late deals on an upbeat day for world grains, with Chicago wheat gaining more than 2%, and Minneapolis spring wheat jumping 3%.
London's beter-traded November contract stood 1.1% higher at £193.50 a tonne.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
Australian Grain Handler Earnings up 66%
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GrainCorp shares jumped nearly 8% after the Australian crop handler unveiled a 66% jump in earnings, raised its profits outlook and flagged upbeat prospects heading even into 2013.
The Sydney-based group reported profits of Aus$88m for the October-to-March half, up from Aus$53m a year before, boosted by the record harvest in its eastern Australian fiefdom.
The company's grain receivals doubled to 14.4m tonnes.
"It's a big year for a volume-based business like ours. Our grains businesses are having an unprecedented year," Alison Watkins, the GrainCorp chief executive said.
The grain marketing division reported earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled, to Aus$35m, with the ports unit seeing ebitda jump 160% to Aus$55m.
Exports jump
And GrainCorp forecast good times ahead, raising its outlook for earnings for the full year to the end of September to Aus$145m-165m, from Aus$115m-135m.
Analysts have factored in full-year earnings of Aus$132m.
"Second-half earnings from grain handling will be supported by the significant carry forward of grain in our country elevators. This means earnings from storage will be higher than the previous half year," Ms Watkins said.
The group also edged higher to 7m-8m tonnes, from 6.5m-7.5m tonnes, its forecast for export volumes, which doubled to 3.2m tonnes in the first half.
Another strong harvest?
Prospects looked better for 2011-12 financial year too, given that GrainCorp expects to begin it with carryover stocks of an "above average" 6m tonnes of grain, compared with the 2.6m tonnes with which it started the current financial year.
The group forecast "busy storage, and logistics and export programmes" for 2011-12, boosted also by the prospect of "positive crop volume" from Australia's next harvest too.
GrainCorp quoted Australian Crop Forecasters data forecasting an eastern Australian barley and canola crop of 19.0m tonnes, compared with some 22m tonnes from the last harvest, but nonetheless a historically strong result.
The forecast assumes sowings rising 8% to 9.5m hectares, but yields dropping 20% to 2.0 tonnes per hectare from last time, when plentiful rains boosted crops.
GrainCorp said that the crop volumes it was left with as of the beginning of its 2012-13 financial year were "likely" to prove "above long-term average" levels.
Malt decline
The data did reveal a 3.4% decline to Aus$ 57m in ebitda at the malt business, blamed on an "unfavourable" exchange rate, following the appreciation in the dollar to its highest for nearly 30 years against the US dollar.
"Consolidation in the global brewing industry is giving brewers additional bargaining power with suppliers," Ms Watkins added.
The first half results were also swollen by a $40.4m gain from marking derivatives to market prices, a windfall the group expects to realise in the second half of its financial year.
Nonetheless, GrainCorp shares closed up Aus$0.62 at Aus$8.38.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
GrainCorp shares jumped nearly 8% after the Australian crop handler unveiled a 66% jump in earnings, raised its profits outlook and flagged upbeat prospects heading even into 2013.
The Sydney-based group reported profits of Aus$88m for the October-to-March half, up from Aus$53m a year before, boosted by the record harvest in its eastern Australian fiefdom.
The company's grain receivals doubled to 14.4m tonnes.
"It's a big year for a volume-based business like ours. Our grains businesses are having an unprecedented year," Alison Watkins, the GrainCorp chief executive said.
The grain marketing division reported earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled, to Aus$35m, with the ports unit seeing ebitda jump 160% to Aus$55m.
Exports jump
And GrainCorp forecast good times ahead, raising its outlook for earnings for the full year to the end of September to Aus$145m-165m, from Aus$115m-135m.
Analysts have factored in full-year earnings of Aus$132m.
"Second-half earnings from grain handling will be supported by the significant carry forward of grain in our country elevators. This means earnings from storage will be higher than the previous half year," Ms Watkins said.
The group also edged higher to 7m-8m tonnes, from 6.5m-7.5m tonnes, its forecast for export volumes, which doubled to 3.2m tonnes in the first half.
Another strong harvest?
Prospects looked better for 2011-12 financial year too, given that GrainCorp expects to begin it with carryover stocks of an "above average" 6m tonnes of grain, compared with the 2.6m tonnes with which it started the current financial year.
The group forecast "busy storage, and logistics and export programmes" for 2011-12, boosted also by the prospect of "positive crop volume" from Australia's next harvest too.
GrainCorp quoted Australian Crop Forecasters data forecasting an eastern Australian barley and canola crop of 19.0m tonnes, compared with some 22m tonnes from the last harvest, but nonetheless a historically strong result.
The forecast assumes sowings rising 8% to 9.5m hectares, but yields dropping 20% to 2.0 tonnes per hectare from last time, when plentiful rains boosted crops.
GrainCorp said that the crop volumes it was left with as of the beginning of its 2012-13 financial year were "likely" to prove "above long-term average" levels.
Malt decline
The data did reveal a 3.4% decline to Aus$ 57m in ebitda at the malt business, blamed on an "unfavourable" exchange rate, following the appreciation in the dollar to its highest for nearly 30 years against the US dollar.
"Consolidation in the global brewing industry is giving brewers additional bargaining power with suppliers," Ms Watkins added.
The first half results were also swollen by a $40.4m gain from marking derivatives to market prices, a windfall the group expects to realise in the second half of its financial year.
Nonetheless, GrainCorp shares closed up Aus$0.62 at Aus$8.38.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
Farmland best bet in gloomy outlook, says Yale's Shiller
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With the exception of farmland, investors should keep their expectations for investment returns low for at least the next 10 years, according to Robert Shiller, an economics professor at Yale University.
Speaking during an opening session of the Investment Management Consultants Association's conference, Mr. Shiller said he expects stocks to gain a mere 2% to 3% annually over the next decade.
In his presentation, Mr. Shiller, well-known for his S&P/Case-Shiller Home Price indexes, illustrated how farmland participated in the real estate bubble from 2000 to 2005, but did not fall as much over the past few years.
“My only bullish call is farmland,” he said.
Download your FREE Farmland Investment Guide here
The reason farmland has held much of the gains that it built up during the real estate bubble, he said, is that, unlike housing, there is a limited supply.
“A single, logical error that people make when buying a home is that they think buying a home is the same as buying land,” he said. “But in the total price of a house, only 20% is the land.”
Mr. Shiller also covered some of the driving forces behind the financial crisis, which he described as the worst since the 1930s.
“Even at this point, with the recession technically over, we are in the worst financial shape we've been in since the Great Depression,” he said.
Download your FREE Farmland Investment Guide here
Mr. Shiller mentioned the usual suspects in explaining the 2007-09 crisis, including relaxed lending practices, a disproportionate percentage of subprime loans, weak regulatory oversight and a government policy that encouraged more mortgage lending.
But the real question people should be asking, he said, is why we ended up in that position in the first place.
“You can't just blame the regulators, because people weren't calling for regulators to do something about it during the housing boom,” he said.
Download your FREE Farmland Investment Guide here
In terms of his generally gloomy investment outlook, Mr. Shiller calculated the real unemployment rate — including the unemployed and underemployed, as well as those people that have been forced into early retirement — at 15.9% — about one-sixth of the adult population in the United States.
The downward trend of the latest consumer confidence data also should be recognized, he added.
“It worries me because if people don't have confidence, they don't spend money,” he said.
Mr. Shiller also pointed out that the homebuilding industry, and probably the banking industry, actually started feeling the pressure at least two years before the start of the financial crisis in 2007.
According to his research, consumer traffic at real estate properties started to fall dramatically in 2005, and that was followed by a dramatic decline in housing permits.
“It was almost like somebody blew a whistle that only dogs and homebuyers could hear,” he said.
Download your FREE Farmland Investment Guide here
Source: Investment News
With the exception of farmland, investors should keep their expectations for investment returns low for at least the next 10 years, according to Robert Shiller, an economics professor at Yale University.
Speaking during an opening session of the Investment Management Consultants Association's conference, Mr. Shiller said he expects stocks to gain a mere 2% to 3% annually over the next decade.
In his presentation, Mr. Shiller, well-known for his S&P/Case-Shiller Home Price indexes, illustrated how farmland participated in the real estate bubble from 2000 to 2005, but did not fall as much over the past few years.
“My only bullish call is farmland,” he said.
Download your FREE Farmland Investment Guide here
The reason farmland has held much of the gains that it built up during the real estate bubble, he said, is that, unlike housing, there is a limited supply.
“A single, logical error that people make when buying a home is that they think buying a home is the same as buying land,” he said. “But in the total price of a house, only 20% is the land.”
Mr. Shiller also covered some of the driving forces behind the financial crisis, which he described as the worst since the 1930s.
“Even at this point, with the recession technically over, we are in the worst financial shape we've been in since the Great Depression,” he said.
Download your FREE Farmland Investment Guide here
Mr. Shiller mentioned the usual suspects in explaining the 2007-09 crisis, including relaxed lending practices, a disproportionate percentage of subprime loans, weak regulatory oversight and a government policy that encouraged more mortgage lending.
But the real question people should be asking, he said, is why we ended up in that position in the first place.
“You can't just blame the regulators, because people weren't calling for regulators to do something about it during the housing boom,” he said.
Download your FREE Farmland Investment Guide here
In terms of his generally gloomy investment outlook, Mr. Shiller calculated the real unemployment rate — including the unemployed and underemployed, as well as those people that have been forced into early retirement — at 15.9% — about one-sixth of the adult population in the United States.
The downward trend of the latest consumer confidence data also should be recognized, he added.
“It worries me because if people don't have confidence, they don't spend money,” he said.
Mr. Shiller also pointed out that the homebuilding industry, and probably the banking industry, actually started feeling the pressure at least two years before the start of the financial crisis in 2007.
According to his research, consumer traffic at real estate properties started to fall dramatically in 2005, and that was followed by a dramatic decline in housing permits.
“It was almost like somebody blew a whistle that only dogs and homebuyers could hear,” he said.
Download your FREE Farmland Investment Guide here
Source: Investment News
Romania’s wheat harvest may rise 23 percent this year
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Romania’s wheat harvest may rise 23 percent this year, helped by favorable weather and higher investment in fertilizers, Agriculture Minister Valeriu Tabara said. The eastern European country may harvest as much as 7 million metric tons of the grain, up from 5.7 million tons last year, he said in an interview in Bucharest. The government wants to increase exports of all cereals so farmers can capitalize on higher international prices, Tabara said reports Bloomberg.
Source: Balkans News
Romania’s wheat harvest may rise 23 percent this year, helped by favorable weather and higher investment in fertilizers, Agriculture Minister Valeriu Tabara said. The eastern European country may harvest as much as 7 million metric tons of the grain, up from 5.7 million tons last year, he said in an interview in Bucharest. The government wants to increase exports of all cereals so farmers can capitalize on higher international prices, Tabara said reports Bloomberg.
Source: Balkans News
G8 Warned of Pending Food Crisis
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G8 leaders are being called on to make stronger ties with Africa a top priority at their meeting in Deauville, France, especially regarding food security and poverty reduction. The International Food Policy Research Institute [IFPRI] warned of another food crisis unless action is taken.
“For the last decade or so, the partnership between Africa and the development agencies or the development partners, has been strengthened significantly. But I think there’s still room to improve. In particular, the G8 countries should really, really think seriously to meet the commitments they have made before,” said Shenggen Fan, IFPRI director general.
Download your FREE Agricultural Investment and Farmland Investment Guide here
It could happen again
At the L’Aquila summit in Italy in 2009, G8 leaders pledged to take action to deal with the food crisis, which saw prices rise and supplies fall. The conditions triggered riots in a number of countries in 2007 and 2008.
Fan said, “When the G8 met in Italy, they committed $22 billion to support smallholder agriculture in developing countries, particularly Africa. Today, that commitment is still there [but] they have not met much of the commitment yet.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned the world is poised to have another food crisis, unless the pledge is paid in full.
“I think it’s already coming. In the last 10 months, the wheat price has increased by a hundred percent. Maize price has also increased by 100%. In addition, prices for meat, dairy products have also increased,” he said.
Feeling the effects
When food prices increase many poor, not only just the consumers, but also even producers, suffer,” he said, and added, “If it happens again, we will probably lose the progress we have made in the last decade or so.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned women and children are the most vulnerable to volatile prices and markets. Hunger and malnutrition, he said, can permanently damage a child’s brain development. “We need to fix this problem.”
He rejected the idea of spending cutbacks on agriculture because of the global recession.
“Agriculture is so critical in terms of hunger reduction, poverty reduction and also in terms of future growth. If we do not invest in agriculture…more people will suffer from hunger and poverty,” he said.
MDGs
Download your FREE Agricultural Investment and Farmland Investment Guide here
The U.N. Millennium Development Goals are due to be achieved in 2015. The goals cover a wide range of issues, including poverty, hunger and health. Fan said the $22 billion in promised agricultural investment would help in reaching those goals.
“I think $22 billion is a good start, but it’s definitely not sufficient. More resources are required. And more importantly, these resources have to be spent more efficiently to achieve certain development goals by improving policies, governance, management and institutions,” he said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
IFPRI reported African countries have taken the initiative to improve their agricultural sector.
“They have made progress in the last decade or so. Many countries have increased their spending in agriculture. We have seen some successes in many parts of Africa. Agriculture growth is accelerating, but we need to continue to do that,” said Fan.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: VOA News
G8 leaders are being called on to make stronger ties with Africa a top priority at their meeting in Deauville, France, especially regarding food security and poverty reduction. The International Food Policy Research Institute [IFPRI] warned of another food crisis unless action is taken.
“For the last decade or so, the partnership between Africa and the development agencies or the development partners, has been strengthened significantly. But I think there’s still room to improve. In particular, the G8 countries should really, really think seriously to meet the commitments they have made before,” said Shenggen Fan, IFPRI director general.
Download your FREE Agricultural Investment and Farmland Investment Guide here
It could happen again
At the L’Aquila summit in Italy in 2009, G8 leaders pledged to take action to deal with the food crisis, which saw prices rise and supplies fall. The conditions triggered riots in a number of countries in 2007 and 2008.
Fan said, “When the G8 met in Italy, they committed $22 billion to support smallholder agriculture in developing countries, particularly Africa. Today, that commitment is still there [but] they have not met much of the commitment yet.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned the world is poised to have another food crisis, unless the pledge is paid in full.
“I think it’s already coming. In the last 10 months, the wheat price has increased by a hundred percent. Maize price has also increased by 100%. In addition, prices for meat, dairy products have also increased,” he said.
Feeling the effects
When food prices increase many poor, not only just the consumers, but also even producers, suffer,” he said, and added, “If it happens again, we will probably lose the progress we have made in the last decade or so.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned women and children are the most vulnerable to volatile prices and markets. Hunger and malnutrition, he said, can permanently damage a child’s brain development. “We need to fix this problem.”
He rejected the idea of spending cutbacks on agriculture because of the global recession.
“Agriculture is so critical in terms of hunger reduction, poverty reduction and also in terms of future growth. If we do not invest in agriculture…more people will suffer from hunger and poverty,” he said.
MDGs
Download your FREE Agricultural Investment and Farmland Investment Guide here
The U.N. Millennium Development Goals are due to be achieved in 2015. The goals cover a wide range of issues, including poverty, hunger and health. Fan said the $22 billion in promised agricultural investment would help in reaching those goals.
“I think $22 billion is a good start, but it’s definitely not sufficient. More resources are required. And more importantly, these resources have to be spent more efficiently to achieve certain development goals by improving policies, governance, management and institutions,” he said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
IFPRI reported African countries have taken the initiative to improve their agricultural sector.
“They have made progress in the last decade or so. Many countries have increased their spending in agriculture. We have seen some successes in many parts of Africa. Agriculture growth is accelerating, but we need to continue to do that,” said Fan.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: VOA News
Hedge fund managers pour assets into farmland as doomsday food scenario approaches
Download your FREE Agricultural Investment and Farmland Investment Guide here
Going back to the land has always been thought of as a thing for hippies, eco-nuts, and doomsday survivalist, but now hedge fund managers are jumping on the bandwagon too.
The New York Observer recently spoke to such a hedge fund manager working on a fund that ranks as approximately the 15th largest farmer in America.
The media first picked up on the land investment pattern in 2008 in the February Times of London piece, "The Hedge Fund Manager Who Bought a Farm," which detailed a British hedge fund manager's attempt to play off the rising prices of grains in order to get a hold of local farmland. It was followed shortly by coverage by the Financial Times that said hedge funds and investment banks were "swapping their Gucci for gumboots".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Today, the increase in the purchase of farmland both in America and abroad is so drastic that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the possibilities of a farmland bubble.
A January study commissioned by the Organization for Economic Cooperation and Development estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will "dwarf" what's currently being thrown into land by two to three times and projected the amount of capital potentially entering the sector over the next decade to go beyond $150 billion.
The recent spike in investments of farmland is being driven by fear. The hedge fund manager and others see a doomsday scenario brought on by a dollar crisis, out of control inflation and an uncertain political climate both domestically and globally.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The CPI supposedly today is something like 1.5 percent. We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis," said the hedge fund manager. "It's also not about what it's been over the last 10 years; it's about what it's going to be over the next 10 years."
Does he think this is an end of the world situation?
"It really is. I tell my fiancee this from time to time, and I've stopped telling her this, because it's not the most pleasant thought," he said. "We just can't keep living the way we're living. It'll end within our lifetime. We're just going to run out of certain things. We'll just have to learn how to adjust."
With recent news that the World Food Program is running out of food (http://www.upi.com/Top_News/World-N...) and the U.S. may not be far behind (http://www.dailyfinance.com/2010/01...), things are not looking good.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"Sometime in the next few years, we're going to have very serious shortages of food everywhere in the world," said investor Jim Rogers on CNBC. "And prices are going to go through the roof."
The new information is just another reason this may not be a bad time for regular people to start growing their own food and even investing in farmland.
Sources for this article include:
http://www.naturalnews.com/032509_farmland_doomsday.html
http://www.observer.com/hedge-funds ...
http://www.upi.com/Top_News/World-N ...
http://www.dailyfinance.com/2010/0 1 ...
Download your FREE Agricultural Investment and Farmland Investment Guide here
Learn more: http://www.naturalnews.com/032509_farmland_doomsday.html#ixzz1NSNbZOBH
Going back to the land has always been thought of as a thing for hippies, eco-nuts, and doomsday survivalist, but now hedge fund managers are jumping on the bandwagon too.
The New York Observer recently spoke to such a hedge fund manager working on a fund that ranks as approximately the 15th largest farmer in America.
The media first picked up on the land investment pattern in 2008 in the February Times of London piece, "The Hedge Fund Manager Who Bought a Farm," which detailed a British hedge fund manager's attempt to play off the rising prices of grains in order to get a hold of local farmland. It was followed shortly by coverage by the Financial Times that said hedge funds and investment banks were "swapping their Gucci for gumboots".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Today, the increase in the purchase of farmland both in America and abroad is so drastic that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the possibilities of a farmland bubble.
A January study commissioned by the Organization for Economic Cooperation and Development estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will "dwarf" what's currently being thrown into land by two to three times and projected the amount of capital potentially entering the sector over the next decade to go beyond $150 billion.
The recent spike in investments of farmland is being driven by fear. The hedge fund manager and others see a doomsday scenario brought on by a dollar crisis, out of control inflation and an uncertain political climate both domestically and globally.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The CPI supposedly today is something like 1.5 percent. We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis," said the hedge fund manager. "It's also not about what it's been over the last 10 years; it's about what it's going to be over the next 10 years."
Does he think this is an end of the world situation?
"It really is. I tell my fiancee this from time to time, and I've stopped telling her this, because it's not the most pleasant thought," he said. "We just can't keep living the way we're living. It'll end within our lifetime. We're just going to run out of certain things. We'll just have to learn how to adjust."
With recent news that the World Food Program is running out of food (http://www.upi.com/Top_News/World-N...) and the U.S. may not be far behind (http://www.dailyfinance.com/2010/01...), things are not looking good.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"Sometime in the next few years, we're going to have very serious shortages of food everywhere in the world," said investor Jim Rogers on CNBC. "And prices are going to go through the roof."
The new information is just another reason this may not be a bad time for regular people to start growing their own food and even investing in farmland.
Sources for this article include:
http://www.naturalnews.com/032509_farmland_doomsday.html
http://www.observer.com/hedge-funds ...
http://www.upi.com/Top_News/World-N ...
http://www.dailyfinance.com/2010/0 1 ...
Download your FREE Agricultural Investment and Farmland Investment Guide here
Learn more: http://www.naturalnews.com/032509_farmland_doomsday.html#ixzz1NSNbZOBH
Pension Fund to Place $500m in Farmland Investments
Download your FREE Farmland Investment Guide here
According to AP2, the $34.6 billion Swedish national pension fund, the business has entered into a joint venture with the $453 billion US pension giant, TIAA-CREF, to invest at least $500 million in grain producing farmland in the U.S., Australia and Brazil.
David Garner, Partner at agricultural and real estate investment consultancy DGC Asset Management (www.dgcassetmanagement.com ) said: "Farmland Investment is now well on the radar of large institutional investors seeking
stable, non-correlated returns. U.S. farmland returned 11.6% per annum between 1950 and 2008, with a much lower volatitlity than traditional asset classes."
Download your FREE Farmland Investment Guide here
Many investors are now looking further afield than stocks, bonds and cash, with many choosing to allocate capital to agricultural land and timber assets in the hope of generating superior returns without altering the overall risk profile of a diversified portfolio.
Download your FREE Farmland Investment Guide here
"Farmland investments in the UK have performed particularly well this last year as values have continued to rise and farmers have enjoyed bumber prices for their crops, whilst our greenfield development projects in South America have generated an annual cash income circa. 10% since 2007, even throughout the recent financial depression." Added Mr Garner.
Investing in agricultural land certainly shows the potential to provide a good store of wealth as land values are inextricably linked to inflation and rising food prices, yet acquiring such assets can be difficult with price of entry and operational expertise preventing many smaller investors from participating.
Download your FREE Farmland Investment Guide here
Source: DGC Asset Management
According to AP2, the $34.6 billion Swedish national pension fund, the business has entered into a joint venture with the $453 billion US pension giant, TIAA-CREF, to invest at least $500 million in grain producing farmland in the U.S., Australia and Brazil.
David Garner, Partner at agricultural and real estate investment consultancy DGC Asset Management (www.dgcassetmanagement.com ) said: "Farmland Investment is now well on the radar of large institutional investors seeking
stable, non-correlated returns. U.S. farmland returned 11.6% per annum between 1950 and 2008, with a much lower volatitlity than traditional asset classes."
Download your FREE Farmland Investment Guide here
Many investors are now looking further afield than stocks, bonds and cash, with many choosing to allocate capital to agricultural land and timber assets in the hope of generating superior returns without altering the overall risk profile of a diversified portfolio.
Download your FREE Farmland Investment Guide here
"Farmland investments in the UK have performed particularly well this last year as values have continued to rise and farmers have enjoyed bumber prices for their crops, whilst our greenfield development projects in South America have generated an annual cash income circa. 10% since 2007, even throughout the recent financial depression." Added Mr Garner.
Investing in agricultural land certainly shows the potential to provide a good store of wealth as land values are inextricably linked to inflation and rising food prices, yet acquiring such assets can be difficult with price of entry and operational expertise preventing many smaller investors from participating.
Download your FREE Farmland Investment Guide here
Source: DGC Asset Management
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