"One sector that outshined most others in 2007 is the agriculture markets, and 2008 looks to be even more active," says Kevin Kerr in his exceptional MarketWatch Global Resources Trader.
He explains, "Investors can no longer afford to not have some exposure to this segment of investing." Here, the advisor reviews the Ag market and his long-term bullishness on Monsanto (NYSE: MON).
"The profit potential of the grains is no shock to us as we've been investing in the agriculture markets this year via cotton, corn, wheat, and soybeans -- all a testament to an exploding ag market.
"Bloomberg recently cited a report by ING Wholesale Banking suggesting that agricultural commodities could climb as much as 40% by 2020 as food, feed and biofuel demand outpace growth in crop yields. That kind of growth and demand is always what is behind a true bull market. High demand and low supply.
"Some analysts say that as prices climb, consumers will stop buying those commodities. In other words, the cure for high prices is high prices. Wrong!
"Many commodities can be replaced if they become too expensive, it's true. Often it happens with copper and other commodities when the price gets excessive. However food, especially food that is now being widely used as fuel as well, is not really replaceable.
"People have to eat and there is only so much land available to grow all of that food. In a country like China, where farmers resort to using every square inch of arable land, we see very high-risk farming techniques. Farmers often resort to hillside farming, which can cause massive soil erosion and other problems down the road.
"As the French aristocracy learned the hard way, the people will stand for many things but starvation is not one of them. It may sound like hysteria to say that people will have to choose between food and fuel -- but is that really all that far from the truth? As gas prices surge and home heating oil prices climb, consumers will be facing almost double the costs this winter as last.
"Where will those prices be in 10 years, or even 20? The fact of the matter is that agriculture is the new gold and food will be more precious as the global population explodes and as water, fuel, land and all the other necessities for farming become scarcer.
"World currencies come and go and right now the U.S. dollar is feeling the heat. Agricultural commodities are turning into a makeshift form of global currency. As food supplies and fuel supplies diminish, the country that can produce the most agricultural commodities will have a distinct advantage.
"One company that is set to benefit from a growing agricultural economy and also has exposure to the growing bio fuel market is Monsanto. The company stands to benefit greatly from $100 plus oil and increased demand. Monsanto is a great addition to our portfolio for the longer term."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
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