South American Real Estate News

How does the market crash in oil prices affect South American agriculture

Post available in: English

How does the market crash in oil prices affect South American agriculture

I have been trying to get my head around the medium to long-term effects of lower oil prices on agriculture. Who would have thought only six months ago we would have oil prices sub-USD 57 dollars per barrel. Now it seems this could last one year or more, which means it will affect the total food and distribution chain. Many companies will try and resist a lowering of consumer prices but in a globalized world this will only work for a short period of time.

As we sell farms in South America the next question is how will it affect land prices? 

Given that most agricultural production today is done by corporates then I believe it will come down to yield. Before the drop a lot of commercial farms in South America were only returning 3% to 4% yield. Logic tells me this number needs to go back up to the norm of 6% to 8%. What do you think?

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

www.gatewaytosouthamerica.com

(Visited 104 times, 1 visits today)

About Gateway to South America

Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone clients in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate marketing services. If you enjoy reading our news site please share it on your social media below.

Post available in: English

1 POST COMMENT

Comments from our readers

1 Comments
Visit us on LinkedInVisit us on FacebookVisit us on TwitterVisit us on PinterestCheck our RSS Feed