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Analysts see investments in Brazil, other arable lands increasing during U.S. drought (8.23.2012)

BOSTON (8/23/12) – As the U.S. Corn Belt continues to experience extremely hot temperatures and drought, U.S. Department of Agriculture Secretary Tom Vilsack has announced the expansion of emergency grazing on 3.8 million acres of conservation land. The expansion is intended to provide greater relief to U.S. livestock producers dealing with shortages of hay and pastureland. More than half (50.3 percent) of all counties in the United States have been declared disaster areas in 2012, primarily due to drought.

Agriculture investment consultants, such as HighQuest Partners LLC, (www.highquestpartners.com) are closely watching the impact that the prolonged drought is likely to have on global corn and soybean carry outs, and the incentive it is creating for increased double cropping in countries such as Brazil.

“While U.S. farmers may be cautious about buying additional farmland, the drought in the U.S. may be bullish for farmland values in areas of the world not impacted. The reduced crop puts pressure on crop inventory carry out which increases prices,” said Philippe de Lapérouse, Director of HighQuest Partners’ Global Food and Agribusiness Practice in St. Louis. “The drought has exacerbated the commodity supply for food, feed and fuel consumption markets in the U.S., coupled with government requirements for ethanol, and demand in China and other developing populations.”

Lapérouse said while Brazil continues to hold promise as a long-term opportunity for investors, large-scale investors have been held at bay because of the governments’ restrictive interpretation of the law for large-scale foreign investment in farmland.

NOTE:
Philippe de Lapérouse, along with many other industry experts, will be available September 17-19 in New Orleans for the 7th Annual Soy & Grain Trade Summit. The event brings together hundreds of international agricultural commodity buyers and sellers in a single venue for on-the-spot trading, making this the annual event that attracts the largest range of global leaders in oilseed and grain production as well as processing and trade. www.soyandgraintrade.com.

In addition, Lapérouse, and other investment experts, will speak on Agriculture as an emerging asset class at the company’s Global AgInvesting Asia 2012 conference in Singapore, Sept. 25-27. This premier agricultural investing conference offers a comprehensive overview of agriculture investment opportunities, risks, and return profiles across global production regions. GAI Asia features keynote speaker Jim Rogers, and panel discussions highlight themes of farmland, private equity, protein plays, palm oil opportunities and more. www.globalaginvesting.com.

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