Copyright 2013 by Real Wealth Report

Published By: Weiss Research, Inc.

Publication Date: November 2013





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My mission is to empower investors and consumers with
unbiased information and guidance to protect their savings,
build their wealth, and prosper in good times or bad.

All rights are reserved. Permission to reprint materials is expressly
prohibited without the prior written consent of Real Wealth Report.
The accuracy of the data used is deemed reliable but not guaranteed.
Theres no assurance the past performance of these, or any other
recommendation, will be repeated in the future.




Introduction

Thanks to massive demand from China, food stocks are already exploding
higher.

But as much a factor as China is in driving food prices higher its important
to note that rising food prices are not just confined to China. Rising food
prices have gone global! Nearly every country on the planet is experiencing
rapidly increasing food prices.

Make no mistake about it: The food sector is an investment area you
can use to protect and grow your wealth while at the same time,
help the world tackle the crisis.





























Part I:
The Global Food Crisis

The way the media reports it, this global food crisis came out of nowhere
and caught everybody by surprise. But if they had been Real Wealth Report
readers, theyd have seen it coming seven years ago.

Back in January 2005, I warned readers that food prices were heading for an
inflationary spiral which would spell the end of cheap food ...

World demand for food will keep growing significantly as
the world population continues to explode and the diets of
developing countries grow more sophisticated. Meanwhile,
the world is running out of arable land to cultivate ...
demand will grow rapidly while supply will struggle to keep
up and could eventually fall behind.

And while nobody else in the financial press was talking about food,
Real Wealth Report was the first to urge readers to invest in what I called
Protein Gold agriculture and food production.

Few investors were interested in food at the time. Why so many investors
ignore the profit potential in agricultural commodities is beyond me, I said.

Admittedly, investing in food is not as sexy as investing in other natural
resources such as gold or oil. [But] the profit potential is just as good, and
theres the added benefit of social cause.

Suddenly, food has taken center stage to share the spotlight with oil and
gold. Suddenly, food is a hot topic. Suddenly, everybody wants to get on
the bandwagon.

The good news is theres still time to beat the crowds to the best agribiz
investments. Seven years after I first called investors attention to the profit
potential and social cause of investing in agriculture, the sector is still only in
its early bullish stages.

So theres still plenty of money to be made in the food sector and billions
of people to help.

The problem is, most investors dont have a clue how best to invest in it.
Having studied trends in agribusiness closely over the last seven years, I do.

So let me help you understand the macro-dynamics of the global food crisis.
Then, Ill give you specific guidance on how to pick the most favorable
agribusiness investments.

A Silent Tsunami

Global hunger is not a new issue. Were all familiar with the heart-tugging
scenes of big-eyed emaciated children with bellies distended by starvation.

Yet these scenes usually have
portrayed localized pockets of
famine, most often the result of
crop failures from prolonged
drought or the ravages of war in
a specific area.

This time, its different because
were seeing people go hungry
all around the world, all at the
same time.

This is a silent tsunami, said Josette Sheeran, former executive director
of the United Nations World Food Program, in The Economists cover
report on the crisis.

Indeed, according to a recent study by the Worldwatch Institute, in 2011,
an estimated 800 million people were classified as undernourished.

That means that nearly one in six people on the Earth suffers from
undernourishment.

Plus, with unemployment and reduced wages as a result of the economic
slump, and food prices that have generally risen for the last several years
and set to rise further in the months and years ahead due to the declining
dollar even the middle class in poor countries are finding that they have to
give up basic necessities such as health care, just to eat.

The middling poor those on $2 a day are pulling children from school
and cutting back on vegetables so they can still afford rice.

While those on $1 a day are cutting back on meat, vegetables and one or
two meals, so they can afford one bowl. The desperate those on 50 cents
a day face disaster.


In well-to-do areas such as the United States, Europe and Australia, rising
food prices havent caused much real pain, although consumers are
beginning to feel the pinch at the checkout counter. Thats because, in those
countries, only about 10% of an average familys budget goes to food.

But the impact of even a small rise in food prices means cutting back or
going without in countries such as Mexico, where food costs can consume
as much as 50% of a familys income ... or Bangladesh and Nigeria, where
food costs are more than 66% of the consumer price index.

Galloping Agflation Skyrockets Food Costs

After declining 75% over the three decades from 1974 to 2005, food prices
made an about-face and started to soar. Globally, overall food prices have
exploded 83% in the three years from February 2005 to February
2008, according to the World Bank.

And even though global food prices have retreated since their 2008 peak,
consumers are still paying almost 16% more for food than they were just
two years ago.

In emerging markets, food inflation nearly doubled in 2007-2008 to 11%.
Dairy prices alone rose nearly 80% in 2007, while grain climbed 42%.

Meat and egg prices in China exploded higher by 50%, dragging up the
inflation rate. Meat prices are especially vulnerable to rising prices. Thats
why Chinas largest pork producer, Shuanghui International, has recently
struck a deal to purchase Smithfield, the largest U.S. pork producer, for
$7.1 billion (including debt).

Many emerging countries are also reporting the highest inflation rates in
a decade.

The World Food Program reports that rising food prices and food shortages
are life and death matters for 20 million of the worlds poorest children.

To try to put a lid on food costs, more than a score of countries have
imposed varying forms of price controls. China boosted export tariffs on
fertilizer by 100%. It also slapped on domestic food price controls, as have
Morocco, Egypt and Mexico.

Meanwhile, a dozen or so countries, including India, Vietnam, Serbia and
Ukraine, have imposed export taxes or have limited food exports. Argentina
and Russia are trying both.

Of course, price controls are populist parlor tricks to fool the masses into
thinking their leaders are doing something. These measures never solve
any problems.

To the contrary, they usually make matters worse by inhibiting production
(why bother when you cant make enough profit to make it worth your while?)
and driving supplies into black markets, where prices soar excessively.

Less Food In The
Global Cupboard

I dont want you to think Im being an alarmist, but consider this recent
warning from UN Secretary-General Ban Ki-moon: The rapidly escalating
crisis of food availability around the world has reached emergency
proportions, which could lead to widespread starvation and topple
governments.

Not only is food more expensive, but in many parts of the world, there
simply isnt enough, as extreme weather has impacted harvests. Hot, dry
weather hurt crops in India, Canada, Argentina and Australia ... while cold,
wet weather put a damper on harvests in the United States.

In fact, in India, rising temperatures and lack of rainfall is stagnating grain
output, threatening Indias food security, according to a weather scientist.

Heavy rains and floods have washed away crops in southern Africa, causing
major destruction of farmlands in Zambia and Mozambique.

Severe drought conditions have sapped agricultural production in Australia,
one of the worlds crucial food-producing regions. At one point, its rice
production plummeted by 98%, and its largest rice mill in the southern
hemisphere, capable of producing enough rice to feed 20 million people, was
closed down and mothballed for lack of crops to process.

Meanwhile, floods and a deadly typhoon have left the poorest people in
Bangladesh standing all day in lines to get government-subsidized rice
handouts. And North Korea is struggling with its worst food supply crisis
since the famines of the 1990s.

But it isnt just poor countries facing a food crisis. Canada, for example,
is already bracing itself for a drastic change. While Canadian food costs are
currently among the lowest in the world, the [low food price] bubble is
going to burst, predicts Mel Fruitman of the Consumers Association of
Canada.


In 2008, we witnessed cases of hoarding in America. With rice prices going
through the roof, restaurants and food-service institutions started stocking
up to hedge against future price hikes.

And quite frankly, nowhere is the food crisis more obvious than in China!

The simple truth of the matter is that ...

China is one of the worlds largest and most volatile customers for
agricultural products. Thats naturally, not going to change because its a
function of having 1.3 billion people, more than any other single country
in the world.

Yet, for a country of its geographical size, China has extremely limited
resource capabilities, not just in metals, which most followers of Chinas
economic growth tend to focus on, but in food production as well.

Meanwhile

Chinas huge income growth and urbanization are boosting food demand
considerably and changing the mix of foods consumed in China.

As incomes grow, demand for meat, fish, vegetable oils, and dairy products
are growing particularly fast. The countrys transition from rural semi-
subsistence to urban lifestyles will also have profound impacts on
consumption patterns, shifting demand from self-grown rice, wheat, and
vegetables to fish, meat, processed foods, and restaurant meals.

The increase in meat consumption may be one of the most important
developments in Chinas agricultural sector. Chinas meat consumption has
gone from 8 million tons in 1978 to 71 million tons in 2012. The Chinese now
eat 260 eggs per person a year, which is equivalent to France.

China produces nearly half of the worlds pork and is the worlds second-
largest poultry producer and third-largest beef producer. Yet even here,
China is pushing the outer bounds of what it can produce domestically.

There are myriad number of other factors affecting food prices in China,
chief among them, transportation and logistics costs which account for
an estimated one-fifth or more of retail prices in China, much higher than
in developed countries.


There are also inadequate port facilities and lack of warehousing and cold
storage facilities. And most of all, as I mentioned already, despite its
geographic size, land and water shortages are severely limiting Chinas
agricultural production.

Surface water supplies have dwindled in much of northern China, and ground
water is being depleted through heavy agricultural, industrial,
and household use.

Meanwhile, environmentally fragile cultivated land is being returned to
forests and grass cover, while a massive amount of previously highly
productive agricultural land is being lost to urbanization.

All this and the concomitant pressure for food prices to rise in China can be
potentially destabilizing, as it can be anywhere in the world, because ...

A Hungry Man Is An Angry Man
Food Riots And Politics Of The Belly

A wave of food-price inflation is moving through the world, leaving riots and
shaken governments in its wake. For the first time in 30 years, food protests
are erupting in many places at once, The Economist recently reported.

The stakes are high. The food crisis threatens global security as much as
or possibly even more than oil, terrorism or geopolitical disputes.

When politics of the belly, as it was called in a treatise by Jean Francois
Bayart, pits the haves against have-nots, the term food fight soon may
no longer just mean silly frat-boy behavior, but instead, bloody conflicts.

Unfortunately, the violence has already started. Not long ago, we saw the
Tortilla riots, breakout in Mexico, involving tens of thousands of protestors,
when the price of flat corn bread soared 400%.

Bloody uprisings over the lack of food or its prohibitive costs have
erupted in Haiti, Cote dIvoire, Cameroon, Egypt, Indonesia, Senegal,
Burkina Faso, Ethiopia, Mauritania and Madagascar.

One person died in the riots in Cote dIvoire ... six in Haiti ... 24 in
Cameroon. And when tens of thousands rioted in Mogadishu, Somali troops
opened fire, killing two protestors.

Troops have been deployed in the Philippines, Pakistan and Thailand to
protect food stores from looting.


Already, the food crisis has sparked civil unrest in 33 countries while 37
countries are believed to be at risk for still more outbreaks of violence and
protest over escalating food prices.

The food crisis is an apocalyptic warning, according to Tim Costello, head
of World Vision Australia. Until recently we had plenty of food. The question
was distribution. The truth is because of rising oil prices, global warming and
the loss of arable land, all countries that can produce food now desperately
need to produce more.

So, you now have a good understanding of the macro-dynamics of the global
food crisis. And I trust you also realize how urgent and how important it is
to global stability that this problem be solved. So, lets turn our attention
in that direction ...

Investing In The Solution
And Helping To Feed The World

The ominous food crisis facing the world offers investors an extraordinary
opportunity not only to make money, and not just based upon China
but also to support the solution to the problem.

Theres only one practical solution: Produce more food. Lots and lots more
food. The World Bank calls it sustainable agricultural intensification.

Theres not a lot of spare land left in the world to turn into new crop land. The
United States, long the worlds breadbasket, has no more new land to farm.

Only Brazil and Russia have any substantial untilled land acreage, but it
would take a decade or more to get it into production. Plus, in Brazil, it
would mean destroying more rain forests to produce crops instead of
breathable air.

Therefore, it stands to reason that to stave off a global food crisis, we must
increase the crop yield from existing farmlands and expand food production
from the sea.

Fortunately, there are numerous ways to do this: More effective fertilizers,
organic farming, high-tech machinery, precision farming methods, higher-
yield crop varieties, integrated crop-livestock production, integrated pest
management controls, improved irrigation usage, and alternative agriculture
methods (e.g., aquaculture, algaculture, hydroponics).


Well also need more efficient processing techniques, along with cheaper
wholesale and retail distribution systems.

The companies that come up with successful, innovative solutions to the
challenge of producing more from less should be big winners
for investors.

They could be food producers, supply and support providers, processors,
distributors and wholesalers, or retailers.

GPS-guided tractors and harvesters, robotic planters and cultivators,
computer-generated and monitored crop management programs, and other
technological aids are already producing record yields in the United States
and other developed nations.

As emerging countries continue to prosper, they will also turn to these
technologies, creating a vast new customer base for those companies.

Investing in commodity futures contracts is best left to the professionals.
But there are numerous agricultural ETFs (exchange-traded funds) that allow
you to participate in this sector.

Plus, some individual companies in the agribiz sector stand out in my
research as sitting in the proverbial catbird seat to profit handsomely by
coming to the rescue in the food crisis.

So, lets look to make some profits and be part of the solution ...

Part II:
My Long-Term Investment
Recommendations In The Food Sector

In this section, I give you no less than five recommendations to seize the
profit opportunity in food stocks, not just from China, but from rising
pressure on food prices all over the world, and because of the ongoing
devaluation of the U.S. dollar, which puts upward pressure on food prices
almost universally.

Before we get started, two important notes: First, in most of the below
recommendations, I suggest purchasing the investments on a pullback.
The share prices I specify below take a pullback into consideration. I also
include risk-reducing protective stops you should use.


Second, I will have many more recommendations in the food sector
going forward. So, be on the lookout for them in the monthly issues of
Real Wealth Report!

Recommendation #1: PowerShares DB Agriculture Fund (DBA), an
exchange-traded fund that tracks the Deutsche Bank Liquid Commodity
Index-Optimum Yield Excess Return Index, which reflects the agriculture
sector. I believe DBA belongs in everyones portfolio for the long haul.

Please refer to the regular monthly issues of Real Wealth Report for
precise timing of when to buy DBA.

Recommendation #2: Archer-Daniels-Midland Company (ADM), a
major player in the agricultural market. It procures, transports, stores,
processes and merchandises a wide array of products, from oilseeds, corn
and barley, to peanuts and wheat. ADM operates more than 230 processing
plants and more than 330 sourcing facilities in more than 60 countries on six
continents. Another essential holding for anyones portfolio.

Please refer to the regular monthly issues of Real Wealth Report for
precise timing of when to buy ADM.

Recommendation #3: Bunge Limited (BG), a U.S.-based agribusiness
and food company that operates in the farm-to-consumer chain. BG has
more than 450 facilities in more than 30 countries, and is committed to
improving the global agribusiness and food production chain. Right now,
Bunge is not a buy, nor even a hold. However, I do expect it to become a
core recommendation in the near future.

Please refer to the regular monthly issues of Real Wealth Report for
precise timing of when to buy BG.

Recommendation #4: Agria Corp (GRO), a China-based agriculture
company with operations in China and internationally. GRO produces corn
seed and sheep breeding products. It also owns through Agria Asia a
50.01% equity interest in PGW, New Zealand's largest agricultural services
company.

Please refer to the regular monthly issues of Real Wealth Report for
precise timing of when to buy GRO.

Recommendation #5: Listed on the NYSE, China Green Agriculture (CGA)
makes humic acid, a liquid fertilizer. The companys main operations are in
China, in 22 provinces, 4 autonomous regions and 3 municipal cities. It owns

two R&D centers and two fertilizer manufacturing bases in Jinong and
Gufeng with an annual capacity of 355,000 metric tons production.

Please refer to the regular monthly issues of Real Wealth Report for
precise timing of when to buy CGA.

Lastly, as noted previously, keep your eye on your inbox for your Real
Wealth Report issues for precise buy recommendations on the above
stocks and for more recommendations in the food sector!