Investing In An Agriculture ETF – Useful Tips

We live in economically tough times. It is easy to see this all around us today. The stock market is in a constant state of volatility and instability. The nation’s debt continues to rise, and jobs are scarce. Finding the right investment options for your portfolio that protect you from the volatility and instability of today’s markets can be difficult.

There is an often forgotten segment of the market that may provide a hedge against future inflation and instability in currency markets. This segment involves commodities. When most investors think of investing in commodities, they think of the movie “Trading Places,” which features chaotic scenes from the commodities pit trading floor. Most investors today don’t realize that you don’t have to be on the floor to invest in commodities and add commodity exposure to your portfolio.

ETFs, or exchange traded funds, allow the every-day investor to trade commodities like they are common stock. For example, if you are an investor that wants to add agriculture related commodity exposure to your retirement portfolio because of its inflation protection, there are several ETFs to choose from. You can invest in broad based agriculture ETFs that cover the entire sector (from wheat, corn, and rice, to livestock), or you can specifically target a wheat agriculture ETF.

There are a few different ways to add agriculture exposure to your portfolio. You could invest in an ETF of agriculture-rich economies, like the iShares MSCI Australia (EWA) and iShares MSCI Canada (EWC). You could invest in equity ETFs that own shares in companies that deal in agriculture, such as the Market Vectors Agribusiness (MOO) and PowerShares Global Agriculture (PAGG). A third way to add agriculture exposure to your portfolio is to invest in ETFs that own futures contracts in different agriculture related products, such as the PowerShares DB Agriculture (NYSEArca: DBA).

ETFs, unlike mutual funds, can be traded intraday just like common stock can. They have tax advantages, and also have low maintenance fees associated with them. Instead of settling on a mutual fund, look at the different commodity ETF options on the market. Agriculture, as stated above, has proven to be a good hedge against inflation.

If you are worried about your retirement portfolio not being able to keep up with future inflation, adding exposure to agriculture related commodities is a good cure for this problem. Be sure to do your research before investing in any stock or ETF.

Pig Farming: What Is Biosecurity?

Pigs are particularly in need of a level of ‘biosecurity’ because they live in herds, often thousands of individuals in close proximity in closed buildings, and are susceptible to a wide range of different diseases which can either seriously interrupt growth and productivity, or at worst wipe out entire herds.

These diseases have various ‘vectors’ – means of spreading – ranging from vehicle tyres and stockman’s clothing to the odd rat, mouse or bird, and even the wind itself.

To protect our stock and our business, keeping everything performing to their economic best, every farm needs a measure of Biosecurity built into its plans.

Let’s start at the beginning. There is a range of infectious agents out there: viruses, bacteria, fungi and parasites being the principal players. They can cause a wide variety of diseases from common colds and inflammations affecting a few individuals to population threatening epidemics. They access their hosts through five ‘pathways’, these being: people (for example stockmen, reps, vets and visitors); pigs (seems obvious, but we’re thinking about individuals brought into a herd from another farm – replacement breeding stock for example); vehicles (bringing in and taking away people, pigs, feed and so on); the environment (wind / water borne diseases, extremes of temperature for example); and vermin (from the farm cat to the ubiquitous rat, and the night-time fox to the daytime starling, rook and chook).

All of these can bring disease of one form or another, and all diseases, by definition cause a negative change in the animal’s physiology, which in turn leads to reduced productivity and therefore a reduced profit (at this point many pig farmers will be laughing, as they don’t often or easily make a ‘profit’ in the UK).

‘Biosecurity’ encompasses a range of measures that can be taken to combat / prevent these pathogens from gaining entry to a very good food source (your pigs) and taking hold of your herd and business.

Three definitions with regard to pig farming would be useful here, I think:

HEALTH is a state of physical and psychological well-being that allows the pig to express its genetic potential for maximising productivity, reproductive performance and lean meat production.

DISEASE means an unhealthy disorder of body and mind, sometimes with pain and unease, that is likely to prevent the pig from exploiting its genetic potential resulting in lowered productivity.

BIOSECURITY is a set of preventive measures designed to reduce the risk of transmission of infectious diseases, invasive alien species and living modified organisms.

So what are these measures? Remembering that you can’t always see a disease, particularly at the early stages of its development; that good Biosecurity is as relevant everyday as it is when there’s a major disease outbreak; and that personal hygiene is as important around livestock as it is at home – then the following are (some of) the things that ought to be considered.

People: only allow people onto the farm who have had no contact with any other pigs for at least 72 hours (some pathogens can hang around on human skin for a couple of days, however much you scrub – and those that stay up you nose are particularly devious: maybe your nose isn’t as complex and interesting as a pig’s, but it feels familiar and a safe place to hide before you can find a nice pig to take hold of through a sneeze, cough or a contaminated breath); only allow people wearing your farm’s Personal Protective Equipment (PPE) onto your unit – the soles of shoes and boots are good transport for all sorts of pathogens wanting to get out and about; use disinfectant footbaths at the entrance c=gate, and preferably between different parts of the farm as well; keep a record of who enters, close and lock gates and keep entrances to a minimum; the ideal is a shower-in / shower-out unit, where only clean personnel wearing pig farm clothes can enter.

Pigs: try to ‘close’ the herd, allowing no other pigs inside – breed your own replacement breeding stock, only use semen from a minimal disease unit; only allow clean, empty, disinfected, vehicles up to a loading ramp away from the main stock buildings / paddocks.

Vehicles: during an epidemic, such as the Foot & Mouth Disease outbreak in the UK n 2001, all stock movements are strictly monitored / controlled, and there are disinfectant soaked sponges and wheel washed at every farm gate. Tyres are a great disease carrier!

Environment: don’t establish a pig unit within five miles of another one, especially down wind; don’t allow pigs to live in an environment that you’d feel uncomfortable in – not too hot, cold, damp or dirty; keep the perimeters intact.

Vermin: depending on your part of the world the list will be a little different to mine, but no less extensive. There are common factors, rats and cats for example, and your local version of our fox and flocking birds like pigeons and starlings. All of these need controlling, which basically means keeping them out, as all can carry something or other from a host outside your herd. At the very least good rodent control is essential!