Our agriculture investment strategy capitalizes on the inexorable trends of population growth and the changing global diet.
Population Growth: The global population is increasing by 200,000 per day and expected to reach 9 billion by 2050.
Supply/Demand Imbalances: Global agricultural output will need to double by 2050 amid declining arable land per capita and slowing increases in productivity.
Emerging Markets: Rapid growth in emerging market economies is resulting in improved diets and increased protein consumption, adding pressure to an already stressed production system.
China and India: These nations currently constitute 40% of the world's population –economic expansion and shifting diets will have a dramatic global impact on agricultural markets.
Biofuels: Alternative fuels have become an increasingly significant factor, with ethanol currently consuming nearly 40% of U.S. corn production.
Environmental degradation: Unsustainable practices and misuse of farmland has strained many agricultural products and soft commodities we have long taken for granted. Shifting production and trade patterns have resulted in price anomalies in the marketplace.
Over-riding weather anomilies: More frequent, more volatile and highly unpredictable shifting weather patterns are the new norm. These climate change induced shifting weather patters are causing 1 in 100,000 weather events in our most productive agricultural zones. From droughts in the US, Russia, China to flooding in Thailand, Phillippines, Australia. Fires and crop failure occurrences are becoming more frequent.
Going forward, we predict agricultural commodity prices will continue to remain volatile and inefficient, thereby affording good trading opportunities for agribusinesses to capture the upside to this trend.
We believe in investing from "field to fork" with balanced exposure to land, agribusiness finance, fertilizer and seed suppliers, disease management, energy efficient technology companies specializing in equipment for planting, irrigating, harvesting, drying, storage, and transport. With the implementation and adoption of energy-efficient technologies and management practices, this sector will have a dramatic evolution. New methods to increase production while minimizing costs and environmental damage will improve economic sustainability and provide new investment opportunities.