Thoughts from Myron — Agriculture Is Where It’s At

By Myron Martin, April 2, 2014

[Ed Note: Here is Myron Martin’s follow-up to his agriculture article. He has agreed to our trading restrictions, and we have not reviewed, approved or screened his stocks or ideas, and the opinions he expresses are solely his own.  Many of the stocks Myron covers are microcap “penny stocks” that can move dramatically with or without fundamental reasons, so please be cautious. Myron’s past commentaries can be seen here.]

In the few days that have elapsed since the potash-focussed column, a takeover offer of another potash company has been announced (Western Potash), and has been quickly bid up close to the takeover offer. Verde Potash (NPK.TO AMHPF), my personal favourite, has also appeared on my CIBC Alerts list along with Allana Potash (AAA.TO ALLRF) and Intrepid Potash (IPI), so it is definitely a sector in play. Even with this second column I will not be able to cover all the investable segments of agriculture, as I also want to cover phosphate, which is equally as important as potash for certain crops. There are also some innovative new growing methods and equipment designed to cut costs for farmers that offer good investment opportunities. Potash is only one small segment of the booming agricultural sector and one we will be focussing a lot of attention on, as the need for more food to feed a growing population manifests itself in higher prices and higher yields, with decreasing arable land available to feed growing populations as cities and urban expansion cut into available crop land in many countries. An easy way to play the broader sector is with agricultural sector ETF / DBA.

As incomes rise in what were third-world countries, there is a corresponding rising demand for higher protein diets, which in turn requires more grain production, to feed more animals: pigs, cattle, chickens and more. In many countries there is also an increased need for irrigation, so the investment possibilities are quite broad. With the market for food products now based on specialties available primarily from specific countries, one that came to my attention recently was New Zealand, which is famous for its dairy and lamb production among other things. In fact, agriculture represents a major source of the country’s income, and 80% of sales for Agria Corporation (GRO), which is the only New Zealand agricultural stock with an American ...

Sign Up for a Premium Membership

To view the rest of this article (and to have full access to the rest of our articles), sign up.
Already a member, log in.

Become a member