Nyt spændende indlæg på Facebook fra Lars Tvede:
"THE WORLD`S POPULATION WILL KEEP GROWING, AND MORE PEOPLE WILL EAT MEAT, SO ISN´T IT A GOOD IDEA TO INVESTMENT IN SOME FARMLAND FOR THE LONG TERM?
Well of course there can be special situations where it is, but on average, farmland is a terrible long-term investment compared to urban property and (especially) equities. To see how terrible, please check the attached illustrations of capital structure over the last centuries in various nations by Piketty. Farmland is the black part in the bottom which ... yes ... gets ever smaller.
But why does that happen?
1. DECELERATING GLOBAL POPULATION GROWTH WITH FINAL PEAK NOW IN SIGHT. The global population growth rate peaked in 1963 and has declined ever since. The world population grew 20% from 1970 to 1980, then 19% until 1990, 15% from 1990 to 2000 and 14% from 2000 to 2010. The UN expects it to grow 11%, 8%, 6%, and 4% respectively over the following decades and we may go below replacement fertility before 2030, which would signal a coming gloal population decline one generation out.
2. RURAL POPULATION HAS PEAKED AND WILL DECLINE.
According to the UN, the global rural population has already peaked and is set to start declining within the coming decades.
3. GLOBAL FARMLAND HAS PEAKED AND WILL DECLINE.
The world`s farmland has been trend-less since 1980 and is also set to decline over the coming decades (see my previous post "Surprising facts about farming, greening and nature").
4. THE LONG TERM TREND IN REAL SOFT COMMODITY PRICES IS DOWN. As illustrated by the attached graph of real wheat prices, the long term prices development of farm products is down. This is due to precision farming and recently also genetic engineering.
Overall, this is a symptom of a broader phenomenon which the economist Julian Simon and others have pointed out, namely that the ultimate resource is human creativity, not natural resources. In other words, the vast proportion of global long term wealth growth comes from new ideas; not natural resources. In fact, 10,000 years ago, many of the items we call "resources" now were not resources then, because people hadn't had the ideas to cultivate or extract them.
Actually, the magazine the Economist had an interesting story about land that indirectly highlights the same issue as they point out, that whereas the long term real price trend of farmland is down, the land prices in big cities rise rapidly. Again, this is because most wealth is created when people gather close to gather and bounce ideas off against each other. And they mostly do that in cities and economic power centers like Silicon valley, Singapore, Munich, Hong Kong, London or central Switzerland. And this would explain why a lot of the landed gentry who inherited great farm estates seem to be struggling with liquidity, whereas young creative types in cities and tech centers who inherited no land actually make fortunes out of seemingly thin air".
http://www.economist.com/.../21647622-land-centre-pre-industr...
https://www.facebook.com/permalink.php?story_fbid=889900131032757&id=836679613021476
"THE WORLD`S POPULATION WILL KEEP GROWING, AND MORE PEOPLE WILL EAT MEAT, SO ISN´T IT A GOOD IDEA TO INVESTMENT IN SOME FARMLAND FOR THE LONG TERM?
Well of course there can be special situations where it is, but on average, farmland is a terrible long-term investment compared to urban property and (especially) equities. To see how terrible, please check the attached illustrations of capital structure over the last centuries in various nations by Piketty. Farmland is the black part in the bottom which ... yes ... gets ever smaller.
But why does that happen?
1. DECELERATING GLOBAL POPULATION GROWTH WITH FINAL PEAK NOW IN SIGHT. The global population growth rate peaked in 1963 and has declined ever since. The world population grew 20% from 1970 to 1980, then 19% until 1990, 15% from 1990 to 2000 and 14% from 2000 to 2010. The UN expects it to grow 11%, 8%, 6%, and 4% respectively over the following decades and we may go below replacement fertility before 2030, which would signal a coming gloal population decline one generation out.
2. RURAL POPULATION HAS PEAKED AND WILL DECLINE.
According to the UN, the global rural population has already peaked and is set to start declining within the coming decades.
3. GLOBAL FARMLAND HAS PEAKED AND WILL DECLINE.
The world`s farmland has been trend-less since 1980 and is also set to decline over the coming decades (see my previous post "Surprising facts about farming, greening and nature").
4. THE LONG TERM TREND IN REAL SOFT COMMODITY PRICES IS DOWN. As illustrated by the attached graph of real wheat prices, the long term prices development of farm products is down. This is due to precision farming and recently also genetic engineering.
Overall, this is a symptom of a broader phenomenon which the economist Julian Simon and others have pointed out, namely that the ultimate resource is human creativity, not natural resources. In other words, the vast proportion of global long term wealth growth comes from new ideas; not natural resources. In fact, 10,000 years ago, many of the items we call "resources" now were not resources then, because people hadn't had the ideas to cultivate or extract them.
Actually, the magazine the Economist had an interesting story about land that indirectly highlights the same issue as they point out, that whereas the long term real price trend of farmland is down, the land prices in big cities rise rapidly. Again, this is because most wealth is created when people gather close to gather and bounce ideas off against each other. And they mostly do that in cities and economic power centers like Silicon valley, Singapore, Munich, Hong Kong, London or central Switzerland. And this would explain why a lot of the landed gentry who inherited great farm estates seem to be struggling with liquidity, whereas young creative types in cities and tech centers who inherited no land actually make fortunes out of seemingly thin air".
http://www.economist.com/.../21647622-land-centre-pre-industr...
https://www.facebook.com/permalink.php?story_fbid=889900131032757&id=836679613021476
SURPRISING FACTS ABOUT FARMING; GREENING AND NATURE
The Earth's landmass is greening at a surprising speed. As environmental scientist Jesse Ausubel notes in this speech, "Global greening is the most important ecological phenomenon on land today". In fact, our biosphere is growing approx. 2 billion tonnes a year, and between 1982 and 2011, global vegetation growth increased 14%. 13 minutes and 55 seconds into this video, Ausubel states: "We argue that both the US and the world is at peak farmland; not because of exhaustion of arable land, but because farmers are wildly successful in producing protein and calories."
Why is the landmass greening? 1) As we abandon farmland, free nature grows back. For instance, in recent decades, former Warsaw Pact nations have abandoned farmland equal to the size of Italy. 2) Increased CO2 provide "areal fertilization", which enable plants to grow faster. Areal fertilization is common in greenhouses, where farmers inject CO2 to stimulate plant growth, and it is visible in the fact that the amplitude of seasonal CO2 between summer and winter has grown. This happens as the entire (growing) biosphere "breathes".
A part of the greening is forest regrowth. The first country to enter this transition was France, where forest cover started growing in 1830 and has since doubled while population also doubled. Today net forest regrowth happens in approx. 60 temperate countries. This is due to precision farming, areal fertilization and because logging was shifted to warmer areas where trees grew faster. Also, since 1960, for instance US use of wood for fuel and building construction has fallen by approx. 70% whereas use of wood for paper has been unchanged. Globally, the demand for wood for veneer, roundwood and fuel has been approx. flat since around 1975.
The peak in use of farmland is a symptom of a broader "de-materialization" trend, which is most prevalent in the richest nations. This means that we get more benefit with less input of space and materials. An example: since the 1940s, American farmers have quintupled corn production while using less land for it. Furthermore, in the 1970s and 80s, they increased productivity while having unchanged use of water and fertilizer, and since the 1990s, their use of fertilizer and water has actually declined while crop yields per land unit kept rising quickly. It's all about precision agriculture. Today, the most efficient US farmers use only 20% as much land per produced unit as world average, so if the whole world did as the US does, we could reduce global farmland by 80 %. It doesn't, but it is moving in that direction.
In the US, the consumption of paper, timber, phosphates, potash, lead, aluminium, steel and copper began to flatten between 1970 and 1990 and have since all fallen. Consumption of plastic peaked around 1995 and has also since declined. Since 1970 the US use of water has been unchanged, mainly because of more efficient water use in farming and energy production.
The Earth's landmass is greening at a surprising speed. As environmental scientist Jesse Ausubel notes in this speech, "Global greening is the most important ecological phenomenon on land today". In fact, our biosphere is growing approx. 2 billion tonnes a year, and between 1982 and 2011, global vegetation growth increased 14%. 13 minutes and 55 seconds into this video, Ausubel states: "We argue that both the US and the world is at peak farmland; not because of exhaustion of arable land, but because farmers are wildly successful in producing protein and calories."
Why is the landmass greening? 1) As we abandon farmland, free nature grows back. For instance, in recent decades, former Warsaw Pact nations have abandoned farmland equal to the size of Italy. 2) Increased CO2 provide "areal fertilization", which enable plants to grow faster. Areal fertilization is common in greenhouses, where farmers inject CO2 to stimulate plant growth, and it is visible in the fact that the amplitude of seasonal CO2 between summer and winter has grown. This happens as the entire (growing) biosphere "breathes".
A part of the greening is forest regrowth. The first country to enter this transition was France, where forest cover started growing in 1830 and has since doubled while population also doubled. Today net forest regrowth happens in approx. 60 temperate countries. This is due to precision farming, areal fertilization and because logging was shifted to warmer areas where trees grew faster. Also, since 1960, for instance US use of wood for fuel and building construction has fallen by approx. 70% whereas use of wood for paper has been unchanged. Globally, the demand for wood for veneer, roundwood and fuel has been approx. flat since around 1975.
The peak in use of farmland is a symptom of a broader "de-materialization" trend, which is most prevalent in the richest nations. This means that we get more benefit with less input of space and materials. An example: since the 1940s, American farmers have quintupled corn production while using less land for it. Furthermore, in the 1970s and 80s, they increased productivity while having unchanged use of water and fertilizer, and since the 1990s, their use of fertilizer and water has actually declined while crop yields per land unit kept rising quickly. It's all about precision agriculture. Today, the most efficient US farmers use only 20% as much land per produced unit as world average, so if the whole world did as the US does, we could reduce global farmland by 80 %. It doesn't, but it is moving in that direction.
In the US, the consumption of paper, timber, phosphates, potash, lead, aluminium, steel and copper began to flatten between 1970 and 1990 and have since all fallen. Consumption of plastic peaked around 1995 and has also since declined. Since 1970 the US use of water has been unchanged, mainly because of more efficient water use in farming and energy production.
