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Strategies & Market Trends : Value Investing
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To: J Mako who wrote (44854)10/6/2011 11:44:23 PM
From: E_K_S   of 78673
 
Agriculture commodity and the Infrastructure theme

My thesis is that everybody needs to eat and in a slow growth (or even negative growth) world economy food and the production of food will be first priority. Profitable and efficient AG companies and/or companies that support the production of AG crops (through more efficient means: harvesting equipment, genetic seeds, new milling facilities that separate seed oils into their components more efficiently (like BG is doing w/ Sollazyme in Brazil) or JIT logistics scheduling & transportation (The Nobel Group is the leader here), etc.).

The main thing is to find the small growing "value" integrator that is diversified in their operations. There should be a minimum level of production that allows favorable margins and efficient production. Combine this with sustainable and integrated practices a much more efficient operation can be achieved. With good management practices and diversification in operations one should avoid much of the short term swings in commodity prices. Of course, future population growth will increase overall world demand for food too.

Others may have a different view on the global market dynamics. My thesis is mainly to invest in companies that bring disruptive changes to the current way things are done making production more sustainable and efficient.

For example, SEB is accomplishing this by integrating their Pork farms effluents & waste into a state-of-the-art bio-diesel operation at their Colorado hog farm. The Nobel Group is the first company to utilize their sugar milling bio-mas waste to produce electricity in a huge integrated bio-mas generating facility in Brazil.

EKS
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