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Page added on November 17, 2012
Very Few People Understand This Trend…
There are only a few people who get it: the era of cheap food is over.
Then there’s bonehead government policy decisions to contend with… like converting valuable grains into inefficient biofuel for automobiles. Paying farmers to NOT plant. Banning exports. Etc.
Of course, the most destructive is monetary policy. The unmitigated expansion of the money supply has led to substantial inflation of agriculture commodities prices.
These fundamentals overwhelmingly point to a simple trend: food prices will continue rising. And that’s the best case. The worst case is severe shortages. This is a trend that thinking, creative people ought to be aware of and do something about.
One solution is to buying farmland overseas. It provides an excellent hedge against inflation, plus it’s one of the best (and most private) ways to move money abroad, out of the jurisdiction of your home government.
In a way, overseas farmland is like storing gold abroad. But unlike gold, it produces a yield, ensures that you have a steady food supply, and even provides a place to stay in case you ever need to leave your home country.
So where are the best places to buy?
After travel to over 100 countries, looking at more properties than I can count, and investing in quite a few of them, I’ve come up with a few top picks that meet the following criteria:
- cheap land costs
- low operating costs
- highly productive soil
- low political risk (confiscation, regulation, market interference)
- foreigner-friendly ownership rules
- clear water rights
- climatic stability
Believe it or not, these simple requirements eliminate most of the world. Much of central and Eastern Europe is too politically risky. Western Europe and the US tend to be cost prohibitive. Most of Asia disallows foreign ownership of farmland. Etc.
But there are still several places that remain. I’ll share two of them:
1. Chile. No surprises, Chile ticks all the boxes. Land costs are very reasonable, and operating costs are low. The soil in regions 6, 7, and 8, is some of the most productive on the planet. And best of all, Chile has some of the clearest, most marketable water rights in the world.
Another great thing about Chile is its location; it’s counter-seasonal to the northern hemisphere, so Chilean harvests tend to come at a time of tighter global supplies, pushing up prices.
As an example, we’re currently harvesting blueberries at our farm in Chile’s 7th region. Global blueberry supply is tight in November, so the price we receive is 35% higher than if we were in the northern hemisphere.
See www.chile-farmland.com for more information, it’s a fantastic resource.
2. Georgia. This may be shocking to some, but Georgia is a stable, growing country that’s definitely worth betting on.
Putting boots on the ground there, it’s clear that Georgia is on an upward trajectory with a bright future, much like Singapore was decades ago. Taxes are low, and the country is open to foreigners.
In fact, the government realized that they have tremendously high quality farmland, yet limited expertise in farming. So while most nations shut their doors to foreigners owning strategic farmland, Georgia went abroad actively seeking foreigners to come to their country.
They hit the jackpot in South Africa, offering land, financial incentives, and even citizenship opportunities to South Africans who would move to Georgia and work the land.
Land costs in Georgia are very low; top quality crop land costs about $3,000 per acre, compared to $10,445 in Iowa, or $12,000 in California. Yet simultaneously, yields are very high for everything from corn to wine gapes to peanuts, on par with both of those states.
It’s definitely a contrarian agricultural investment worth considering.
11 Comments on "Very Few People Understand This Trend…"
BillT on Sat, 17th Nov 2012 2:11 am
Yes, the West is dead. The Middle East is a powder keg, and Asia does restrict ownership. While I agree that getting out of Dodge is a good idea, I’m not sure going to a past/future part of Russia is a good idea. Chile might be good, but not if you think there is a future in shipping food to the North. As oil prices climb, international shipping of goods is going to shrink and disappear. There is a reason that they did not ship much food in the days of sail. The food rotted before it got to market. Move for your own good, not for the idea that you might get rich. That is what killed the West, greed.
Pacman on Sat, 17th Nov 2012 8:58 am
Oh right, Farming Coz that’s easy to just add to your existing lifestyle There’s a reason why country folk show contempt to townies that move to the country and think they can cope. There’s an old saying “if you want to make a small fortune in farming, start with a big fortune”
GregT on Sat, 17th Nov 2012 9:44 am
Time to start thinking about self sustainability.
There are hundreds of millions doing it already.
The unfolding crisis is not going to affect them, like it will for most of us in North America.
Arthur on Sat, 17th Nov 2012 11:10 am
Food prices are going to hurt mostly people in the third world, people living on a dollar a day, not in the west, where too much cheap food is still the problem. Even if food prices doubled most people in the west could easily cope as there is so much that can be traded off against it: new cars, holidays, gadgets, insurances, buying ‘stuff’, fashion, booze, etc., etc.
Norm on Sat, 17th Nov 2012 11:30 am
Holy Cow. Every day, another 200,000 people. So it takes about 14 days, and you have another City of Denver to feed. Isn’t that extraordinary. What a joke society. It will obviously result in some kind of total calamity. I like that statistic, thats one to hang onto, showcasing all the absurd, hopeless policies. Only way out of this mess is go dig a bomb shelter in the middle of nowhere.
BillT on Sat, 17th Nov 2012 12:13 pm
Arthur, are you sure about that? How many summers like this one in the dust-bowl-in-the-making Midwest until America is importing most of it’s food?
Europe is only a few degrees away from a similar fate. Excess food? Maybe, but not if the 20%+ that is already imported into the Us stops. Then there are the 50 million already being supported by a beggar government with food stamps, millions more falling off the employment roles every year and the youth unemployment approaching that of Greece, how long do you think the Us can last? One year? Two? And if the Us fails, what happens to Europe? Can you speak Russian? Chinese? Or maybe Iranian?
I doubt the true 3rd world will hurt much more than they do now. I see people living on less than $2 per day and doing ok. You would probably never consider living that way, but they are surviving and they can still smile and laugh and enjoy their lives without malls and jobs and taxes and the stress of Western life.
We have a caretaker living on our property at the present that has a wife and 3 kids. He lives in a house mostly made from local materials and is planted with flowering bushes and fruit trees and chickens, etc. We pay him the equivalent of $50 per month to clear brush and watch over the 10 acres as we still live 3 hours away by bus and only visit about once a month until we can build. He raises pineapples and coconuts and shares them with us when we visit. We hope to help him improve his life soon, but he has been living without a regular job all of his 39 years. His family is adequately dressed and happy. Easy life? No. But maybe his life is better than most in the West?
pinger on Sat, 17th Nov 2012 12:41 pm
Interesting and what would you say about my country Bulgaria.
DC on Sat, 17th Nov 2012 2:42 pm
You may well be right on your point Arthur. However, what happens when people allow those activities to drop off in order to feed themselves? The economy will continue to contract as more economic actively is directed towards food production and consumption. Normally this could be offset somewhat by a rise in food-related employment, but since our industrial food system is not built for anything like citizen participation, food employment will barely budge. So yea, I agree with your assessment totally, we DO have some cushion, but the real question is ‘For how long?’, and what do we do after its gone? Already people are noticing food getting more expensive, even here in N.A. Heck even Im noticing it. Restaurants are getting ridiculous to go to. I had a chicken burger and a 2 beers last week and it nearly set me back $30.00. And things are creeping up at grocery store too, to the point its noticeable. My perception is food dollars are not going as far as they were even a year ago.
YMMV.
ohanian on Sat, 17th Nov 2012 2:55 pm
I think I understand that overpopulation is a fucking problem. Or rather it is a problem that is pregnant in meaning. And that overpopulation can give birth to other problems which would grow up to challenge humanity’s numbers on this planet. Or that every human is a problem but there are more of us now, so there are more problems for us to deal with.
SilentRunning on Sat, 17th Nov 2012 3:24 pm
Until Population Growth is stopped and reversed, none of our problems are solvable.
Most people don’t understand where population growth inevitably leads. If the population grows at *only* 1% per year, in under 10,000 years that would mean that every atom in the observable UNIVERSE would have to be part of a human body. Aint no way that will ever happen – ergo – population growth HAS TO stop one way or another. The course we’re drifting towards leads inevitably to massive famine and ecocide.
Kenz300 on Sat, 17th Nov 2012 4:53 pm
Access to family planning services needs to be available to all that want it.
People that can least afford to provide for themselves are having the most children and trapping their children and themselves into a life of poverty, suffering and despair.
Endless population growth has an impact on the rest of the world. As food shortages occur prices will increase all around the world. As energy supplies become more scarce due to an expanding demand prices will rise around the world. As over fishing continues fish stocks will collapse impacting people around the world. The unemployed in the world continue to migrate looking for jobs driving down wages and increasing unemployment. Overpopulation is not only a third world problem. The effects of overpopulation will impact every country and every person over time.
Every country needs to develop a plan to balance its population with its resources, food, water, energy and jobs. Those that do not will be exporting their people and their problems.