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Experts believe that the globe will see the demand for food rise by at least 70% in the next half century. Food production must rise by 70% A report by the UN’s Food and Agriculture Organisation predicts that the production of food must increase by 70% by 2050. This has sparked interest in Brazilian agriculture as an asset class. Just ten years ago, the Matopiba region of Brazil was totally unproductive and unusable for large scale farming operations. More recently, with the addition of lime and phosphorus to the soil the region has become responsible for producing 12.2 million tonnes of Brazil’s grains and oilseed crops, which is 8.2% of the whole country’s production. The Matopiba region has the perfect climate for farming, and boasts a further 2 million hectares of fertile, productive land that will benefit from future investment into farmland infrastructure and machinery. This is leading to wide interest amongst foreign investors hoping to benefit from the growth in Brazilian agriculture and the ever increasing price for crops, as the demand for food outweighs the current and on-going supply of productive, fertile land with which to grow them in, agriculture and farmland investments remain strong alternative strategies to help diversify your portfolio and hedge inflation. DGC Asset Management have been involved in the acquisition and development of farmland in Australia, and has part-funded the developments of greenfield sites in Latin America for five years; returning yields of between 8 and 16 per cent, with additional upside in the capital value of underlying farmland assets. David Garner, Partner at DGC said, “Agricultural land represents one of the most attractive investments for the long-term investor seeking a stable yield and capital appreciation. I think we will continue to see institutional Investors increases their allocations to the agriculture sector in order to reduce equity exposure and correlated their portfolios with rising food and land prices against a backdrop of increasing demand and resource scarcity”. Whilst equity markets continue to deliver hitherto unseen volatility, Investors will continue to seek out real asset investments that are unlikely to depreciate to nothing overnight, and where the underlying assets deliver a cash flow to replace the income lost in an environment of low interest rates. With such Investor interest offering short term price support for good quality agricultural land, investing in farmland and agriculture is likely to feature in more investment portfolios throughout 2013. – See more at: http://www.dgcassetmanagement.com/news/agriculture-food-production#sthash.piYd60Z1.dpuf Continue reading →