Investing in farming without owning the farm may seem like a good idea, particularly if the economy is facing a recession as people still need to eat. You may find investing in agriculture a safe place to invest your finances when looking after your future. Purchasing an entire farm often isn’t feasible and there is a substantial amount of time and effort in looking after farmland, crops, and animals so we have outlined some alternative suggestions to your investment needs.
Investors have access to a wide range of publicly-traded companies, operating in the farming / agricultural sector. Agricultural stocks are benefiting from huge trends economically, with inflation pushing agriculture stocks higher as well as population growth pushing the demand for food. The world’s population is up roughly 300% in the last century, this means more mouths to feed across the globe and as a result, agriculture stocks climb.
If you’re looking to invest in agriculture, take a look at Wynnstay PLC for investor information, proposed final dividend of 10.00p are up 6% taking the total price to 14.60% for the year. – (Wynnstay final results presentation, January 2021)
Soft commodities are made up of cocoa, coffee, cotton, sugar, orange, and many other perishable products. Over time, commodities and commodity stocks provide return that differ from various other stocks out there. The potential for a good return in investment is high and there is potential for a hedge against inflation.
You’ll find that the supply, demand, and geopolitics all influence the price of all commodities both positive and negative so it’s important you do your research into the best commodity market for you and your finances. Despite the potential risk factors with investing in soft commodities, there is a chance here to get some good investment return with many commodities trading well below their cost of production.
Sustainable agriculture is a fantastic way for ESG investors to help fight against climate change. Animal agriculture contributes towards a large amount of greenhouse gases, more specifically the methane emissions, with such gases from UK agriculture accounting for around 5.5% of the countries total GHG emissions. Being able to cut down on enteric fermentation, the gases produced by cows, sheep, pigs, and goats is a great place to start, therefore investing in the process of creating a feed which allows the animals to process their food better, therefore reducing the amount of gas produced is a step in the right direction for sustainable agriculture.
There are huge opportunities for growth in the renewable energy sector with the International Energy Agency predicting than renewable energy will be supplying about 12.4% of the entire globes demand by 2023. Renewable energy is anything covered by, Wind, Solar, Water, Biomass, Geothermal, Ocean Waves, and Green Hydrogen. This a huge change, positively seeing all types of renewable energy surging over the next 10-20 years. If you’ve been doing your research, this will be why you’ve seen the power stocks seeing huge spikes, traders are now spending in the market, preparing for a continued growth in the years to come.