When a commodity trading guru like Dwight Anderson, founder of the iconic Ospraie Management, has something to say on the market outlook, people tend to listen, especially when he’s consigning the last great commodity bull run to the dustbin of history and buying gold and farmland for the next crisis.
Anderson is the former Tiger Cub, whose Ospraie Management at one time ran the world’s biggest commodity hedge fund, with close to $4 billion at the peak.
Buy the Farm to Avoid a Crisis
While we have previously discussed the plight of the US farming sector, with astounding increases in debt and the erosion of farmland values, Anderson sees more than just value here.
“I think farming, in terms of the productive side of the industry, is still an incredibly under-appreciated asset and business in that you’ve got land where every single year, on average, you’re going to grow more. You maintain your water table, your soil, the nutrients there, and I get productivity growth every year. That is awesome. Every other one of the productive businesses, you produce less every year.”
“It’s hardest to get real pricing power in agriculture, because you actually are growing productivity per year, versus the decline rates in the others. But as an asset to own for currency protection, inflation protection, just a general income, yes, yield, farming is phenomenal.”