Agricultural products, including corn, wheat, and soybeans, are absolute necessities for human existence. And with the world’s population quickly increasing, demand for these commodities will skyrocket… and push prices much higher.
That’s one good reason to invest in agriculture.
In addition, as oil prices head higher bio-fuels will increasingly be used as an alternative energy source – which, in turn, will boost the demand for agricultural products (especially corn).
Furthermore, investing in agriculture is a great hedge against inflation – and it looks like inflation is coming. Elevated inflation drives the prices of agricultural products higher – and, let’s face it, people are always going to need to eat, no matter how bad things get with the economy.
My favorite way to invest in agriculture is with the PowerShares DB Agriculture (DBA). This exchange traded fund (ETF) tracks widely traded agricultural commodities. As the prices of those products rise, the price of the ETF goes up.