Ahead of the April 23-25 Global AgInvesting (SM) Conference, keynote speaker and renowned commodities guru, Jim Rogers, gave an interview in which he detailed why "Agriculture" is such an attractive investment and what he foresees in the future for agricultural investing including his thoughts on what many consider to be a looming farmland bubble. What I found interesting was the fact Rogers' believes we are in a cycle change, a cycle that once allowed the "financial" type institutions to be in charge, but has now started shifting to bring the producers of "real goods" back in charge. Stunningly, he is predicting that a time is coming in which students of farming will surpass levels of those obtaining MBAs. He even goes so far as saying the most promising payback in agriculture is, and will be, to be a farmer. He cites huge opportunities for a
return to farming for many reasons, one of the biggest obviously being that the world needs more food and more people that know how to grow it. Rogers specifically noted that farming will once again “be one of the great areas of the world economy” because of higher commodity prices. Rogers explained that the price of agricultural commodities “has to go much, much higher or we are not going to have any food at any price”. One of my favorite lines was when he said, “If you don’t want to go into the fields … then you better open a chain of restaurants in [America’s] Midwest or in the outback of Australia, or get a Lamborghini dealership in Oklahoma or in Nebraska because farmers are going to be driving the Lamborghinis; stock brokers are going to be driving tractors.” A similar theme is being acknowledge by many of the worlds top thinkers. I am excited to see the world finally acknowledging those who have worked so hard to build a successful operation. In terms of farmland values, Rogers seems to think we are just seeing the tip of the iceberg, and that strong demand could continue to push farm land values higher for the next several years. He estimates this demand will then push prices and technology to all new levels. These new levels of demand and innovation, in Rogers’ view, will bring actual cultural changes that will put Ag front in center in American’s collective minds. This will no doubt create and environment where prices and returns could be great for farmers and investors. I have to say, this is the most bullish tone I have heard out of Rogers in a long time, and I certainly don’t disagree with him. He actually confirms much of what I believe and have tried to convey in my daily writings. I hate to point out the negatives, but we need to realize, along with the good often comes the bad. As the world talks more and more about "producers" leading the way our competition will start to drastically increase. Large corporate farming will become more of the norm in many parts of the country. Big corporate money will be backing huge operations that will be seeking out ways to do it all a little bit better, faster and cheaper. I can’t stress enough how tough it may start to be as more and more enter or come back to the profession. We need to stay on top of our game, keep the books up to date, make sure the equipment is strong, improve our marketing skills, improve our development of Precision Ag, etc... Remember, it’s NOT the big who eat the small... it’s the fast who eat the slow! Don't procrastinate, move quickly with precise intentions, have a plan and execute. If you do this you are almost certain to stay ahead of the pack.
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