If you undervalue food it will be wasted. The reality is farmers are harvesters of solar energy and we can provide grains as feedstock to any one of a numberof end uses.
1. Food 2. Fuel 3. Feed for value adding to animal proteins 4. Feedstock to produce value added hydrocarbon based compounds, eg biodegradable plastics, lubricants, greases.
Land is a diverse asset class because with expensive oil end uses are opened up to produce purely energy based feedstock streams.
The problem I see is how is government going to meddle with markets in the upcoming crisis, and as discussed the crisis cannot be avoided now. IMO with farmers being a rather insignificant voter base, you will see a very interventionist hand from government's perspective. Already are in respect to animal protein production. Now they are targeting lambing percentages?
You'd be mad to be buying land at the moment. The smartest thing is to consolodate or move down to a smaller unit and build equity. Government is risk number one because at the end of the day it will be politically popular to 'intervene' when food inflation is out of control. That is in line with the emergence of the socialist agenda.
Watched 'Fast Food Nation' last night. It seems the war on animal proteins began many years ago.
In the meantime the family farm will continue to get sold down and corporates will move in and they will be successful because they will be farming with better grain prices and no borrowing costs. Increasingly they are becoming betetr at solving labour and brain drain issues.
