Blog > Gold and Resources > Blog article: Food Crisis 2008: Invest in Genetically Modified Food
 | Email This Article Email This Article  | 

Food Crisis 2008: Invest in Genetically Modified Food

Posted May 17, 2008

by Krista Das

Baltimore — (TFN): The food crisis of 2008 is much different from any that we’ve seen in years past. It’s not about famine in one country anymore. It’s about poverty and malnutrition worldwide. Fifteen percent of the world’s population lives on just one dollar a day. With food costs rising on average by 20 percent, that’s about one billion people that must give up health care and education in order to avoid starvation.

To help us better understand this crisis and to find out what companies in the first world are doing about it, I’ve invited Christian DeHaemer, global analyst and editor of Material Profits.

Click here to join the show!

Christian DeHaemer: Thanks, Krista; glad to be here.

Krista Das: Everyone is talking about how rapidly food prices are rising, particularly on rice and other grains and how this is going to cause the absolute poverty level to skyrocket worldwide. What sort of increases are we talking about here?

Christian DeHaemer: If you look at corn in particular, it’s up 250 percent in the past two years. Wheat, rice, soy beans are also up quite a bit; between 150 and 250 percent. A lot of this is due to rising prosperity in many emerging markets, where they now can afford more food—and they want meat in particular. A lot of this grain is going to feed livestock.

Krista Das: There’s supposedly a lot of hoarding going on with rice. Places like Costco (COST:Nasdaq) let customers buy only a certain amount of bags. Is this artificial or is there really, truly a food shortage here?

Christian DeHaemer: Well, there is a food shortage, but its been exaggerated by a number of countries including India, Vietnam, Kazakhstan, the Philippines, Indonesia, Egypt. A lot of countries that have living memories of famine are limiting exports of their food stuff and putting high tariffs on exports. This is exascerbating the hoarding. It’s raising prices across the board and it’s a real problem.

Krista Das: Should there be more government intervention or will this make things worse?

Christian DeHaemer: If you look at the government intervention we’ve had, such as in the U.S., with ethanol taking off 20 percent of the corn supply to use for gasoline and limiting imports of Brazilian ethanol, it obviously raises prices here.

Government interventions never work and if they do work they cause supply disruptions somewhere else.

Krista Das: To counterbalance this problem, genetically modified (GM) foods, which received heavy opposition in the past, are now becoming increasingly popular because they make food more affordable.

What makes GM food cheaper and how is the process of genetic modification to crops performed?

Christian DeHaemer: GM foods can increase the yield per acre, especially in warmer climates where there’s a lot more insects. You don’t have to use pesticides or as much pesticides because they’re built to be resilient to the pests. In Brazil, per acre yields have increased as much as 170 percent.

Krista Das: What are the projections for genetically modified food over the next year?

Christian DeHaemer: GM foods continue to expand about 18 to 20 percent a year.

In Europe they have a historical opposition to GM foods. They’re currently only about eight to 12 percent of the crops there. The farmers really want the GM food there because they want to compete with the rest of the world. There’s a couple of companies, like BASF and a Swiss company that are making genetically modified foods and they want the European government to allow their foods to get to the farmers.

Krista Das: It sounds like there is a lot of money to be made in this industry. If we want to invest in companies within this industry where can we find out more?

Christian DeHaemer: Well, Krista, you can go to MaterialProfits.com. I’ve dedicated the next couple of issues to this problem of ag-flation, as I call it. There’s a number of companies I’ll be recommending that’ll solve these problems and will make a lot of money in the process.

__________________________________________________________________________________

This super-safe $15 stock is the “sleeping giant of India”. Most investors think they can’t own it, but they’re wrong! While plenty of Americans know that China is a fast-growing economy, a small group of investors are making seven times more money investing in India.

And right now, you have a rare opportunity to slip through a “secret backdoor” and own shares of this $15 Indian company that I guarantee will post a triple-digit gain in the next 12 months… or your money back. Over the next five years, you could see 10 times that amount… maybe more!

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. Sign up through your favorite reader here. Or, if you prefer, have the feed delivered to your email.


Related Articles


Posted by Krista Das · Filed Under Gold and Resources 

Comments

close Reblog this comment
Powered by Disqus · Learn more
blog comments powered by Disqus