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Agriculture Outlook Americas Conference Highlights

Nov. 14, 2010 4:12 AM ETCSAN, BRXX, BRAQ, INXX, PIN, DBA, ADM, BG, NTR3 Comments
Michael Ferrari profile picture
Michael Ferrari

The Agricultural Outlook Americas Conference was held in Boston this week. This year's event brought together a mix of growers, investors and technologists, with discussions ranging from new investments on the farm to currency hedges. The three day event contained too many interesting discussion points to cover in a single article, so I will address only the highlights here, with follow-up related to some of the focused discussions in future columns.

On the first day of talks, much of the focus was decidedly LATAM, with a recurring theme addressing a potential land bubble across all of the Americas. With the ag commodity futures markets as volatile as they have been lately, readers should note that the focus was weighted towards investment opportunities with a slightly longer time horizon, and the focus started out with an emphasis on farmland acquisition opportunities, and how to view potential exits with a multiyear, or even multi-decade holding period. Many of the discussed opportunities always seemed to always point back to Brazil, but difficulties associated with foreign investment in land assets were noted. Investing directly in agribusiness holdings with strong financials and/or targeted ETFs may provide the easiest access as a starting point (CZZ, BRXX, BRAQ).

In one panel in particular, each panelist was asked about a potential bubble in agricultural investment (primarily land), the response was a resounding no. But it is important to remember that agricultural land is still essentially a real estate play, and the forces of supply and demand are still at work. We all know the statistics that support the premise that intensification of agricultural production will be absolutely necessary if we are planning to adequately feed the growing population in the coming decades (there are an expected additional 1 billion mouths to feed over the next few decades). Intensification, while replete with drawbacks, also implies that the rate of

This article was written by

Michael Ferrari profile picture
Michael Ferrari is a Senior Scientist and Director of Commodities at aWhere, where his research and technology transfer activities focus on improving their global agricultural/climate/life sciences data platform. He is also the founder and principal at Atlas Research Innovations, which provides applied research and bespoke services to clients in the private and public sector, government, and academia. Previously, he was the Director of Agricultural Commodity Research & Risk Management for The Coca-Cola Company, the Director of Informatics and a Principal Scientist at NASA for Computer Sciences Corporation, Vice President of Applied Technology and Commodities at WTI, and a Research Scientist and Commodity Trader at Mars. He spends much of his time building tools and models with sensors and data, creating algorithms, and directing commercial research activities towards the examination of the global food and climate complex from a systems perspective. Michael is a frequent speaker at scientific, commodity and data/technology conferences around the world, where his talks focus on the confluence of human-environmental-technology interaction and the broader relationship of these topics to societal issues including climate, food and energy security, and global change. Michael holds a PhD in Geophysical Fluid Dynamics and Environmental Biophysical Modeling from Rutgers; his doctoral work in numerical modeling was supported by the NASA Goddard Institute for Space Studies.

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Comments (3)

learnmoney profile picture
If you don't have rain you don't feed the population so only buy good quality agricultural land in places that have rainfall.

When I am long gone it may come to pass that ag subsidies will have been resolved but not in the immediate future and that goes for development by MON and others.............I know a little about what is going on as a member of my family works for one of the biggest research businesses involved with new seeds for the world. A very difficult business.

No Africa to start with.....................
Good report, but one BIG factor not mentioned, IMHO, was the potential effect that the USA's potential progress toward balancing the federal budget would have on crop yields and potential ag profits. For instance, if 'we' actually get serious about balancing the federal budget, agricultural subsidies would at the very least, have to be discussed. Ethanol is a subsidized product, made from a subsized product, in this country. If the subsidies were changed, as happened previously with ethanol, the ripples will go around the world. Why no discussion or mention of this possibility, or any mention at all of the potential change that changes in ag subsidies might cause? We all say we 'must' address these budget problems, then we all go about our business as if 'we' won't be affected at all. To me, that says it all. If we want to have a tomorrow for our children and grandchildren, we must get serious about addressing the federal budget deficit, and that means some discussion about ag subsidies.
Gmoney 2000 profile picture
Thanks for the report Michael, it was a very informative read on the event. Was there much talk about the introduction of additional African acres due to drought resistant seeds? From the supply side a seed introduction that adds previously unareable land could significantly impact US exports over the next 5 years.
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