Layoffs at John Deere blow up investment thesis on food shortages; US farmland to see liquidation

Venture Capital and Private Equity firms poured tens of billions of dollars were poured into shares of farm equipment makers, fertilizer companies, and even indoor vertical farms and cropland. Conventional wisdom was that these were very safe investments that would yield outsized returns as the world struggled to feed itself over coming decades. That investment thesis has now collapsed, amid plunging global food prices and soaring farm productivity. The ag sector of the developing world produced record crops, and did so without the expensive equipment produced by major Western farm equipment makers, such as John Deere and Case New Holland. As VC and PE firms are now seeing double-digit annual declines in cash flows from their investments into the agriculture theme, we should expect them to sell their positions, and return to tech sector investment. Resources and links: Deere Announces More Layoffs John Deere announces more Midwest layoffs John Deere announces another round of layoffs, this time of 287 workers in Quad Cities Bill Gates Portfolio: 7 Best Stocks to Buy Now Barrons, World Hunger Is on the Rise. These Companies Have Solutions. Politico, The world food crisis is about to get worse McKinsey, A reflection on global food security challenges amid the war in Ukraine and the early impact of climate change The World Is Headed for a Food Security Crisis. Here’s How We Can Avert It Who Will Feed China?: Wake-Up Call for a Small Planet (Worldwatch Environmental Alert) Bill Gates Increases His Stake in Deere to More than 10% Investment firms are buying more farmland Reuters, Investment funds stocking up on US farmland in safe-haven bet Average Chinese national now eats more protein than an American: UN food agency China factory sourcing website: What does vertical farming mean to investors? The vertical farming boom is over (for now). What went wrong? U.S. Agricultural Land Values and Cropland Cash Rents Reach Record Levels Amid Falling Commodity Prices Land Report: Bill Gates nation’s largest private owner of farmland