Post on 16-Jul-2015
Protect Your Retirement Income
from Future Food Inflation with
this Simple Strategy
Photo credit: Flickr/WayTru
The Problem:
Over the next 50 years farmers need to produce
more food than they have produced over the past
10,000 years.
The Problem:
The driving force is population growth, with the world’s population expected to reach 9.1
billion by 2050.
The Problem:
The driving force is population growth, with the world’s population expected to reach 9.1
billion by 2050. Credit: Flickr/Lauren Manning
The Problem:
Meanwhile, more of the world is rising into middle class, which is increasing the demand for protein.
The Problem:
The driving force is population growth, with the world’s population expected to reach 9.1
billion by 2050. Photo credit: Flickr/Mark Turnauckas
The Problem:
On top of that there is less arable land to grow
crops…
The Problem:
…as well as more droughts.
The Problem:
The driving force is population growth, with the world’s population expected to reach 9.1
billion by 2050. Photo credit: Flickr/Robert Couse-Baker
The Problem:
This scenario means that world food production needs to rise by 70%...
The Problem:
…while food production in the developing world
must double.
The Problem:
To double food production in the developing world alone investments must
rise by 50%.
The Problem:
This will put a tremendous strain on nutrient levels in
the soils.
The Problem:
The driving force is population growth, with the world’s population expected to reach 9.1
billion by 2050. Photo credit: Flickr/Bert Kaufmann
The Opportunity:
However, that’s also a tremendous opportunity for fertilizer companies…
The Opportunity:
…which can supply the potash, phosphate and
nitrogen needed to bring nutrient levels back to
proper balance.
Potash facility in Saskatchewan. Photo credit: Flickr/Just a Prairie Boy
The opportunity
Under this scenario food inflation is quite likely. However, you can protect yourself
from some of this inflation by investing in the fertilizer companies that will supply the
world with needed plant nutrients.
PotashCorp
• World’s largest fertilizer company by capacity.
• Produces all three primary crop nutrients (potash, nitrogen and phosphate).
NYSE: POT
Photo credit: Flickr/Alisha Vargas
Agrium
• Major retail supplier of agricultural products and services.
• Global producer and marketer of agricultural nutrients and industrial products.
NYSE: AGU
Photo credit: Flickr/Noel Zia Lee
Mosaic
• One of the top four producers of potash in the world.
• The top phosphate producer with more capacity than the next two largest producers combined.
NYSE: MOS
Photo credit: Flickr/Dodo-Bird
Bottom line
• All three companies are well positioned to take advantage of the future need for crop nutrients.
• Each continues to expand capacity to meet future demand.
• However, each offers investors a different opportunity set.
Bottom line• PotashCorp is a direct investment in all
three crop nutrients and it pays the best dividend of the bunch.
• Agrium also produces all three key crop nutrients as well as having a strong retail presence in the agricultural sector.
• Mosaic is more of a pure play on potassium, with a strong dose of potash.