The following chart published by Business Insider shows a powerful long term trend which should provide solid returns for agribusiness investors over the following years. At the same time that global population is expected to continue growing substantially, arable land per capita will be on a steady decline for decades.
The industrialization process in emerging countries means that cities and industrial areas are growing over arable land, reducing the most important and irreplaceable resource for agro production. Scarcity is one of the most important determinants of value, and arable land is becoming scarcer on a global scale.
Demand for agro products is not only sustained by growing population, eating habits in emerging markets are changing rapidly. As big masses of population get out of poverty, they demand a higher calorie intake per capita. Better quality and more varied food is one of the first demands made by those who are getting out of poverty in countries like China and India.
The supply and demand equilibrium looks positive for agribusiness in the long term, and there are other cyclical forces which are moving in the same direction. Monetary policies in the United States, Europe and Japan are extremely expansionary due to economic problems of all kind in most developed countries. As governments around the world print more money, agro products should increase in value versus those devalued currencies.
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