Wheat Price up 6% so Far in 2012 - Wheat Farmland Investments Should Benefit

Very positive news on wheat prices. So far, wheat is up 6% in 2012. Furthermore, we came across this facinating prediction from Saxo Bank, saying that wheat prices could double in 2012. This is part of a section Saxo Bank has called "Outrageous Predictions", which are events that would be unlikely but significant. Still, even though this prediction is indeed unlikely to come to pass, wheat is clearly poised for a strong year, and farmland investments in this sector will do very well. As we have a farmland investment in Australia as well as a farmland investment in Europe that both focus on wheat farming, the performance of wheat so far is indeed very heartening.

Farmland and Agriculture - Immune to Drops in Commodity Prices?

Well, maybe not entirely, but it is our opinion that the agriculture sector sector is less sensitive to the ups and downs of commodities and the global economy than such other areas as metals and mining. This article on the investing website Seeking Alpha made much the same point. The article states:

"Agricultural commodities on the other hand face much less elastic demand. Less housing in construction in China hurts copper demand, but it does not change the fact that people will not stop eating. Emerging economies may be facing slowdowns, but they are not contracting or halting to the point that consumers will be forced to change back to a grain based diet from their newly acquired meat based diets."

This captures exactly why we favor agriculture as our favorite commodities sector. We prefer to play the sector by investing in farmland, as we believe that farmland as an investment brings a certain stability and peace of mind to a portfolio that agriculture stocks and futures may not achieve/ However, anyway you decide to play it, if you are investing in commodities do try to make sure that agriculture is is included.

Finally, we are very pleased to note here in this press release that the African farmland project Green World represents recently paid an initial yield of 16.2%!

Update on GreenWorld's African Farmland Investment

While we focused in our previous post on GreenWorld's farmland investment in Australia, there is also wonderful news in regards to our farmland investment in Africa. This investment in rice farmland in Sierra Leone recently paid a 16.2pc dividend, prooving that its target for dividends of 15.2pc per annum was spot-on. Farmland prices in Africa start from a very low base, and there have been quite a few lare institutional investors such as pension funds and University endowments investing in farmland in Africa.

Please contact us at info@greenworldbvi.com for further information!