When Boone Pickens, the world famous oil investor, announces that he is investing in water rights, it is time to take note.
Clearly we have a rising global population, a declining supply of fresh water, agriculture (crops use about 80% of U.S. water) using an increasing portion of water and the dollar dropping increasing global grain prices.
There may be a unique asset category that picks up on all of these trends at once, and is also supported by indefinitely rising global demand. It is the grains. There are grain ETFs that now provide this opportunity.
As emerging middle class families come into being in countries throughout the world, the first thing that they will want is more and better food. The grains are uniquely positioned to benefit from this trend.
The grains, unlike gold or other kinds of commodities, don't rely on a crisis, or new homebuilding, or many of the other variables that other commodities require. As the water supply worldwide becomes a bigger problem, it will accelerate the increases in grain prices.
It is one way that I can think of to be a participant in the coming age of water wars.
Disclosure: Author is an investor in the Rodgers Holdings portfolio of grains and metals (RJA) and (GRU)
