Carol Chapman member for 24 weeks 10 hours Send a message

Most Americans are accustomed to being surrounded by a world of plenty, with supermarket shelves so bountiful in their array of goods that folks from less prosperous parts of the world have been known to feel faint at their first sight of all that food to choose from. So for some of us, it’s difficult to imagine a world of scarcity, and even more difficult to think about making investments based on scarcity.

A hundred years ago, the average American spent about 45% of annual income on food. Today, that figure is down to about 15%. We’ve taken cheap food for granted, but that’s already changing.

We’ve already seen with oil what can happen when resources get scarce. And over the past few months we’ve seen the basic staples of life, from corn and wheat to rice, accelerate in price at nearly as fast a pace as gas at the pump.

Crops have been failing all around the country and around the world. We’ve seen a pasta protest in Italy and a tortilla crisis in Mexico. The floods in the Midwest have inundated fields and destroyed a goodly portion of this year’s corn crops. Already, corn was under pressure by increasing demand for ethanol. If the amount of Wheaties or corn flakes in the cereal boxes you buy seems to be shrinking, you’re right. It’s either raise prices or cut the portions for companies like General Mills.

So is there a way to invest that will counterbalance the pain we feel at the checkout counter? The prices of agriculture-related companies and of commodities have already had a good run. Fertilizer, believe it or not, has become the new black gold, with some companies that make potash, the basic ingredient that produces more bountiful crops on a large scale, tripling in stock price.

Nevertheless, it’s not too late to think about investing in some of the key agricultural companies that help support the industry: those dealing with equipment makers, fertilizer, irrigation, and transport.

One of the easiest ways to gain exposure to this thriving area of the market is through an ETF (exchange-traded fund), which you buy and sell just as you would a stock. For example, there is an ETF with an appropriately named stock ticker MOO that includes 37 companies around the world engaged in agricultural operations, fertilizers, livestock operation, agricultural equipment and biofuels.

So fill your pantry with affordable food while you can, and think about stocking your portfolio with some agriculture-related investments.

Note: This is not a recommendation to buy or sell any commodities, but rather information to improve your investing skills.