Tuesday, March 24, 2009

Shopping For Farmland?

An ocean of money from global central banks is about to flow into commodities which should trigger a boom.

And as legendary investor Jim Rogers predicted, ``Power is shifting now from the money shifters, that got us to trade to paper and money, to people who produce real goods, whether it is agriculture or mining or whatever. This has happened many times in history, what you should do is become a farmer, or you should go and start a farming network. That’s what you do, because in the future the farmers are going to be one of the best professions you can possibly have."

And farming as the next sunshine profession should also mean a boom in farmlands.

And where are the best priced farmlands?
According to the Economist, ``FARMLAND has outperformed the property market in many countries. Investors rushed into agricultural land as food prices soared, helping to push up prices. A hectare of farmland in England increased by 16% (in sterling terms) in the year to January 2009, according to a new report by Knight Frank and Citibank. And even against a resurgent dollar this equates to $17,100 a hectare, the highest among the countries shown. Canada looks a bargain by comparison with neighbouring America: prices are around a tenth of the $11,000 a hectare paid in Ohio. The prospects for eastern Europe are bleaker, thanks to poorer infrastructure and economic prospects. Farmland in Ukraine fell by 75% to $125 a hectare."

The economist chart above doesn't cover much of farmland prices in emerging markets.

Yet not all farms are equal-there will always be the issue of infrastructure (farm to market), accessibility to water, government regulations, soil quality or structure, climate, security and etc...

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