Seven Wonders of the Investing WorldFOOD AND WATERThe CSIRO...

Seven Wonders of the Investing World

FOOD AND WATER

The CSIRO forecasts food prices will rise in real terms thanks to what it tactfully calls climate “variability”, rising third-world incomes and less land devoted to farming as more is diverted into biofuel production and urbanisation.

The UN’s Food and Agricultural Organisation forecasts food production must rise 70 per cent by 2050 to meet global demand even as arable farmland is shrinking. And right in our backyard, Asia’s middle class will increase sixfold by 2030 and they’ll want more protein and higher quality food.

“New Zealand is doing well with dairy prices. It’s why the NZ dollar has been going higher,” Oliver says.

Australia has two listed dairy companies: Warrnambool Cheese & Butter, 89 per cent owned by Saputo, and Bega Cheese.

Short of trying your hand on the land yourself, other listed agribusinesses include Australian Agricultural Company, the world’s biggest wagyu beef producer and Graincorp which processes and markets wheat, barley and canola crops. The venerable Elders and Ruralco provide farm services.

For international stocks think Archer Daniels Midland (which tried to take over Graincorp), Fonterra, Monsanto, and Unilever.

Oh, and what do livestock and crops need?

Fertiliser – that’d be Incitec Pivot, Ridley and Nufarm and heaps of listed phosphate miners.Oh yes, water. CSIRO tips Australian water usage to rise 42 per cent by 2026.

Listed Tandou grows cotton and invests in water rights. An unlisted fund specialising in water entitlements is Blue Sky Water Fund. Its manager, the listed Blue Sky Alternative Investments, also runs the Water Utilities Australia Fund.

Or there’s the listed Rural Funds Group which is similar to a real estate investment trust except it leases land, livestock and water rights to farmers.

For something different there’s Phoslock Water Solutions’ technology that removes algae from water.

Read more: http://www.theage.com.au/money/investing/seven-wonders-of-the-investing-world-20140522-zrjyd.html#ixzz32ymHyyLD