Invest with food for thought

Food and fertiliser will be two top investment picks for the next decade and longer, according to Rowan Jones, of Entrust Private Wealth.

The former West Coast Eagle gave producers an insight into the world economy and its affect on the beef industry at last week's Butterfield Beef field day.

The level of debt in developing nations, particularly the Eurozone and United States, is concerning as too is securing food supply for developing nations where the GDP per capita is rising.

Mr Jones said the rising GDP in emerging economies was increasingly due to urbanisation.

It's estimated that more than 350 million people will move from rural Chinese areas to the city for better jobs, pay and quality of life.

"Urbanisation leads to higher incomes and a higher quality of life which leads to high-protein diets," Mr Jones said.

"A study by the Economist magazine found the amount of calories people in the emerging world derived from meat, dairy and oils in 2000 was 20 per cent and in the year 2050, it predicts 29 per cent.

"To get there, meat production is going to have to double by the year 2050. To allow meat production to double, one of the key components is soybean production, which will also need to double."

At the same time, Mr Jones explained how China had been stockpiling US soybeans, so while supplies worldwide looked sufficient, in the US, it was concerning.

"Food supply is becoming such a big concern in emerging countries because of arable hectares per capita," he said.

"In 1960, there was 0.4 arable hectares per person in the world. Today, there is about 0.2."

By 2050, the world's population is forecast to increase by one to two billion from seven billion.

"At the same time, yield gains are lower than in the 1960s," Mr Jones said.