Unlike many passing fads in the investment business these past few years, agriculture is something that will always remain relevant. We all have to eat, and farmland is one of the most trusted sources to obtain that food. Consumers will cut their luxury expenses before cutting their calorie intake, so it’s a safe investment that isn’t affected by market trends.
Organic and farmer-certified foods are all the rage now, and consumers are willing to part with more money for guaranteed quality that they can count on. You’ll need to research about how to handle an agricultural investment, such as all the terms and equipment that you’ll need to purchase such as roller vane pumps. Hiring a dedicated professional is ideal when encroaching on unknown territory.
It’s an advantage for your agricultural business to invest in renewable energy sources. Together, farming and renewable energy make a winning combination because the wind, solar energy and biomass can be infinitely harvested by farmers. That turns into energy to run the farm, and it becomes a self-sufficient cycle. This is huge because unlike other investments that require sourcing components and materials, agriculture can stand on its own without external help.
There Will Always Be Demand
Agriculture is a necessity in human life. It produces the most basic needs for us: food and clothing. The world’s population is rapidly increasing, and with it, the demand for basic commodities will continue to increase. Many of the world’s developing countries are gobbling up farmland to use for factories and housing, which makes arable farmland expensive and highly sought after. This also bumps up the demand and price for most of the commodities that farmers produce such as grain.
Here’s an interesting observation. The United States has a population of around 318 million, and roughly 327 million acres of farmland are used to produce the food required to feed everyone. In contrast, China’s population of 1.3 billion people only need about 269 million crop acres to grow the food they need. This means that the United States has far more farmland to feed their population than even China needs.
China is becoming an economic hotspot because of the incredibly cheap prices for land and the low labour costs. It will continue to develop at an alarming rate, and it’s best to jump on the bandwagon before all the seats are taken.
Increase in Biofuel Usage
The increase in biofuel demand has made farmland an increasingly attractive investment. The production and usage of ethanol and biodiesel are increasing every year around the world. Both of these commodities are created through agricultural processes.
Ethanol is made through the fermentation of sugar such as the ones found in corn. Biodiesel is a newer biofuel, and it’s produced through the transesterification of organic fats, such as the oil derived from soybeans. Biodiesel can be used as an additive to petroleum diesel or used as a complete replacement. The use of biofuels is set to increase several percent over the next couple of years, which makes agricultural investments a wise one.