Agribusiness is a unique culture in the world today. It is like taking the small family farm and exploding the scale of work that gets done so a wide variety of agricultural products can be provided. It has unique challenges that must be faced, but the rewards are clear. When agribusiness has a good season, then people have enough food to eat. When it isn’t a good season, the economics are still generally positive thanks to available subsidies.
Before considering an investment or getting personally involved in this industry, it is important to look at the key pros and cons of agribusiness so an empowered decision can be made.
What Are the Pros of Agribusiness?
1. It is an alternative asset class.
Agribusiness provides income, plain and simple. It also provides a solid income source for individuals who work within the industry. There is a low correlation to assets that are in the mainstream, such as equities, fixed income, and property, so what you see is typically what you get.
2. It provides something that people always need.
Challenging seasons may make for the best investment opportunities because there is one rule all humans follow: we need food to eat. Whether it comes from livestock, grains, or vegetables, changing weather conditions or even dietary fads can make this industry look attractive.
3. There can be certain tax benefits.
Some income from agribusiness may have certain tax benefits for workers and investors. Of course getting involved in this industry shouldn’t be for tax purposes alone, but there is the potential to make more wealth per capita in this industry than in others.
4. It allows for diversification.
The best kind of portfolio has income sources from multiple sectors. Workers who are able to perform in multiple sectors have the best chance for employment. Agribusiness allows for both.
5. There are high levels of personal risk involved.
If you are milking a cow, there’s a chance you might get kicked. A tractor might flip over. Animals may carry diseases that can be transferred to workers. Agribusiness will always contain a high level of personal risk for those who are directly responsible for the care and maintenance of the individual enterprises.
What Are the Cons of Agribusiness?
Find Out In Part 2 Of The Series Next Week.
About The Author
Although millions of people visit Brandon’s blog each month, his path to success was not easy. Go here to read his incredible story, “From Disabled and $500k in Debt to a Pro Blogger with 5 Million Monthly Visitors.”
