Purchasing precious metals for a hedge against inflation is nothing new. Many individuals have been flocking to precious metals for some time now. The fundamentals of purchasing tangible assets are similar in many ways no matter the type of commodity. The adage “if you can’t hold it, you don’t own it” has never been more true.

We believe the paper markets will come crashing down. It is only a matter of time. As individuals continue to look for safe places to allocate their wealth, there are less and less options available.

Along with precious metal ETF’s and mining company stocks, many advisors have been shouting about the importance of purchasing agriculture related assets. Once again there has only been a few ways to allocate your assets in agriculture, but that has changed as a new opportunity has come on the scene. You can now purchase physical food as a tangible asset. There are a couple of questions that arise when thinking about purchasing bulk food.

  1. Why purchase bulk food and why now?
  2. How and where do you store your food?
  3. How do you get bulk food back into the market when prices rise?

Why purchase bulk food and why now?

“In the 1970′s inflation led to wage-price spiral, which ultimately led to wage price controls.” Lee Bellinger April 2011 Independent Living “This time around, however, global inflation is being led by energy and food prices. So it won’t be the 1970s wage-price spiral that ravages Americans, but a food-price spiral which has already commenced globally with revolutionary consequences.”
Liquidity is another commonly held concern when purchasing any commodity. Bulk food, much like physical precious metals can be readily bought and sold through a global network. Unlike paper assets, bulk food can be used for personal use or it can be sold back into the market relatively easily. In a time of political and financial break down, tangible assets will be the only currency. We believe at some point there will be supply issues therefore secure possession is key. If you choose to have your bulk food stored in a secure vault, be sure that you have enough supply in your home to get you through a local disruption. (Emergency plans, preparedness kits and home food storage is a must.)
Commercial and consumer demand are also great reasons to purchase bulk food. With or without federal subsidies for ethanol, there are still government mandates and tax incentives that make producing ethanol attractive. Many elected officials and “green” energy supporters have done an about face concerning the use of ethanol but that will not prevent 41% of the US corn supply from being poorly used in the production of ethanol. Many of the uprisings across the globe in 2011 were in direct relation to food prices. Many governments are currently buying as much food as they can in order to avoid higher food prices that they are anticipating. Many believe that there will be supply constraints. When the supply chain is disrupted prices increase and those that are holding bulk food can benefit greatly.

  • * Egyptians spend 40% of their monthly income on food
  • * Tunisians spend 36% of their monthly income on food
  • * Americans spend 6.1% of their monthly income on food. As food supplies become more strained and the dollar continues to decline, food cost in America will sky rocket.

Diversification

Diversification is often spoken of in a way that many individuals never question. How diverse is my portfolio if I am in all paper assets? No matter if you have some agriculture, gold / silver, energy and real-estate stocks, bonds or mutual funds, you are not diversified. True diversification is having allocations in different asset classes. All paper is a disaster waiting for a place to happen and much of the waiting is coming to an end in a rather abrupt fashion.

How and where do you store bulk food?

Long-term food storage is nothing new. The earliest humans to walk on earth practiced many of the same techniques that we use today. Temperature, moisture and pest still remain the most common threats to long-term food storage. For bulk food owners  or for personal food storage the key is to have an environment with low humidity, a constant cool climate and the ability to use a chemical free process to ensure that all pest and eggs are dead. When buying bulk food as an asset, buyers are offered monthly storage in ideal storage facilities. Bulk Food International will provide the proper container and environment for long-term storage. The storage fees are minimal much like storing precious metals in a vault. BFI also offers you access to your food at anytime and will ship your food to your chosen destination if you choose to store it somewhere other than their facility.

How do you get grain back into the market when prices rise?

BFI will facilitate the sell of your bulk food back into the market or to other buyers. You can also develop your own route for selling your food back into the market or to consumers. BFI will charge a small percentage to facilitate the transaction.

For more information about bulk grain Contact:   terry@bulkfoodinternational.com