Food and Agriculture

Food production and agriculture have been undergoing dynamic change and innovation, driven by factors evolving on a global scale:

  • the increasing need to produce sufficient calories to feed a growing world population;
  • the need to produce those calories more efficiently to conserve increasingly scarce soil and water resources;
  • the need to distribute and transport perishable products efficiently and dynamically from the point of production to the point of consumption;
  • the increasing affluence of global populations, that changes the composition of diets, as well as the nature and quality of calories consumed;
  • the increasing use of agricultural commodities to serve functional needs beyond food - in biofuel, medicinal, or nutraceutical applications. 

 As a result, value creation strategies are beginning at the farm gate and reshaping the entire farm-to-fork value chain.  The increasing returns available to innovative agricultural companies are offsetting the traditional inherent risks of weather, commodity cycles, and biological frailty from disease or pests.  This is attracting the attention of more non-traditional pools of capital seeking alternative investment strategies that can mature over a longer development cycle than traditional institutional time frames.  These new entrants into the marketplace recognize that agriculture dynamics are global; that weather and soil conditions don't stop at national borders; and that nature has provided a harvest counter-cycle between the hemispheres - so both large and small transactions are crossing borders more frequently, and the capital markets among diverse national cultures are sometimes hard to bridge.  Regardless of their nature or origin, these investors nonetheless look for the same sort of governance, risk mitigation, analytic insight, and market development opportunities in agriculture that they see in traditional industries like manufacturing or business services.  

 Our US principals have been through these dynamics with clients and through their own operating backgrounds.   They understood, and have managed through, commodity cycles, weather events, breeding cycles, and the various state and federal regulatory frameworks that govern food safety, payment mechanisms, agricultural liens, and quality certifications.   Through their counterpart bankers in other MAI offices, this same expertise extends to Europe, the Americas, and the Far East.  We can help navigate multiple markets across the globe that are all awakening to the same reality: there is great, critical, and constant value being created in agriculture, and the global need for continued innovation is certain enough to bank on. 

 

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