If Food Prices Only Get Higher, Agriculture ETFs Can Rise, Too

[ETF Trends]

ETF Trends - Keeping a Grip on Exchange Traded Funds (ETFs)

One expert doesn't see the price of food coming off its high horse anytime soon, which makes agriculture-related exchange traded funds (ETFs) especially timely.
Jim Rogers, who co-founded the Quantum Fund in 1969, says that even if oil prices fall, the price of food is still likely to rise because of the laws of supply and demand, reports Graham Summers for Seeking Alpha.
Between 1974 and 2005, the world's population grew by more than 1.1 billion people. But during that time, most of that population wasn't eating a western diet (that is, heavy on the meat). But as these emerging economies begin eating more like developed countries, food is going to get more expensive. It takes 17 pounds of grain to generate one pound of beef.
These are just a few of the reasons food prices are climbing. Oil prices do have something to do with it, as it makes farming a more costly venture. And severe drought hurts crop production.
Michael Sullivan for NPR reports that countries where rice is a staple, such as India and China, are already curtailing how much they export. They want to have adequate supplies at home, and it's leaving a shortage in the rest of the world.
Exposure to the agriculture sector can be had in several ETFs. Among them:

• PowerShares DB Agriculture (DBA): up 18.4% year-to-date
• Market Vectors Global Agribusiness (MOO): down 0.4% year-to-date
• iPath Dow Jones Agriculture (JJA): up 10.8% year-to-date

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