I like Jim Rogers, he’s a bit of a maverick and often misunderstood, but you just know when he speaks about investing that he really has got money on the line because he only talks about investments that he himself has made.
The man believes Europe and the USA are on the one way track downwards to irrelevancy and that the successful countries in the future will be in Asia, but in his most recent interview he seems to believe that farming and food manufacturing are going to be the big profit industries of the future.
Talking about farming he says that most farmers in the developed world are into their 5th decade or more, and that means when they get too old to work most won’t be replaced. Actually he makes sense, I know quite a few farming families and the kids really have no interest in slaving away on the kind of uncertainty and low margins that farming provides.
So Jim Rogers is saying that he’s noticing that food prices are depressed, but with worldwide shortages coming up prices will have to increase, and so too will political instability and rioting. And when that happens people who invest in agriculture are going to be the people to benefit.
From a real estate point of view that says to me that productive land is going to be a major growth market, particularly if the product, whether it is wheat, or olives, or even oranges, basically any type of food, can be grown in sufficient numbers to make farming profitable.
However, if prices of food increase to the extent Jim Rogers is anticipating, this means the way we value agricultural land will change, simply because the prices fetched on harvest will be higher. Of course access to markets will be important, but even land without easy access may still be profitable, and countries like the USA, Canada, Brazil, even parts of Europe can easily emulate Australia where ‘road trains’ run.
If you have the money, investing in the agriculture industry could be an excellent move, and if not, well being an agent for farms and tracts of farmland could generate huge commissions in the future.