Global macro trends continue to strengthen the case for agriculture investing, despite the sputtering global economy.
During these times of market instability, “real assets” such as metals, land and agricultural commodities have become more attractive to investors wary of putting their money into financial assets.
“When there is long-term instability there tends to be a flight to real assets,” said Mike Boehlje, an agricultural economist at Purdue Extension. “People move away from financial assets. Agriculture is a real asset industry, so that does offer some protection.”
Population growth and dietary changes across the developing world are increasing the demand for meat and livestock. This in turn increases the demand for grain to use as feedstock. Growing production of ethanol is contributing to demand as well.
The agriculture sector remains strong, particularly in light of conditions across other industries. “Other industries are downsizing, some even permanently,” Boehlje continued. “Relatively speaking, agriculture is a good place to be.”