Tags: commodities

Coxe: Food the Next Bull Market

By Julie Crawshaw   |   Wednesday, 12 Nov 2008 01:45 PM

BMO Financial Group Global Strategist Donald Coxe says we are in the midst of the greatest commodities bull market of all time, and the most important commodities are not oil-based products like plastic, but food.

In fact, Coxe believes milk will prove to be a more important commodity than oil in this decade.

The biggest story, Coxe believes, is going to be high-protein food. The way to profit, he says, is by investing in fertilizer stocks, genetically-modified seed stocks, and farm-equipment stocks.

"If you look at areas under cultivation, wheat has only gone up in hectares a little bit in a decade, (and) rice is flat in a decade." Coxe told Barron's.

"Meanwhile, our need for protein has gone up dramatically because people are consuming more beef and pork."

According to Coxe,the global financial crisis has pushed the global food crisis off the front page at a time when people are actually getting together to figure out how to deal with it.

"We have an enormous challenge, but we also have the technology to increase farm productivity. Investors who invest in this are going to make a lot of money," he said.

During the Great Depression, Black October, and the Asian economic crisis, food prices were at historic lows, observes He Changchui, assistant Director-General for the U.N. Food and Agricultural Organization.

"No matter how dire the situation, food was still plentiful and cheap. Today, the story is different, food is in shorter supply," Changchui told CBS News

At the 2008 Rome Food Security Summit, 181 nations pledged more than $11 billion. The funds are to be used for immediate food aid and for investing in and revitalizing the agricultural sector to boost crop production.

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BMO Financial Group Global Strategist Donald Coxe says we are in the midst of the greatest commodities bull market of all time, and the most important commodities are not oil-based products like plastic, but food. In fact, Coxe believes milk will prove to be a more...
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