New York, New York (PressExposure) May 04, 2012 -- Danny Esposito, editor for Penny Stock Detectives, believes that Asia's growing economies and populations-particularly China's growth-mean a growing demand for agricultural commodities in general. As reported in his recent Penny Stock Detectives article, the new wealthy middle class in China now wants to experience the diets of Western economies they heard so much about growing up. Esposito argues that China's new middle class is demanding meat like never before, which means that grains should outperform on the upside, because they are what is used to feed the animals.
"While American consumption of meat is at its lowest in two decades, China consumes 10% more meat than they did just five years ago," notes Esposito. "Global meat production is expected to increase by 20% or 50 metric tons just in the next few years, with much of it led by Asia and China's growth story."
According to Esposito, as a response to China's growth story, the agricultural commodities arm of the Chinese government has instituted programs to encourage the development of farms that concentrate on pork, poultry and beef. As a consequence, China is set to become the largest producer of pork in 2012 at 51.3 metric tons, says the editor, which is half of the world's production. Similar to the American experience, consumers in China have recently switched out of expensive pork and into the cheaper chicken, and will move back and forth with the price swings of these agricultural commodities, according to the editor.
So, while prices can swing greatly between the different meats, notes Esposito, there is one area of agricultural commodities that will see increased demand and prices regardless of which meats are consumed: grains like corn, barley, oats and wheat to feed the animals.
According to Esposito's Penny Stock Detectives article, it is estimated that China's growth will require 20-25 million metric tonnes more of corn in the next few years to feed all of these animals. In addition, it is estimated that the demand for agricultural commodities like oats, barley and wheat to feed all of these animals will increase by at least 20% just in the next few years alone.
China is planting as much corn, oats, and barley as possible, but the country doesn't have the farmland to meet its needs, believes Esposito. Therefore, the U.S., Argentina, and Brazil are exporting record amounts of corn, oats, and barley to China to meet the agricultural commodities needs.
Due to limited farmland in China, there are agricultural commodities companies here in the U.S. and Canada that are helping to supply China's growing need for grain feed, says Esposito. These grain feed prices have increased and should remain elevated, the editor believes, as the demand for these agricultural commodities continues to remain high thanks to China's growth story. This means that the profits these American and Canadian companies will experience should be very good in the coming years, according to Esposito, which is why he believes investors will benefit from participating in this space.
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10 and the stock market in general.
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Sasha Cekerevac, BA, and Danny Esposito, B. Comm., lead editorial stock analysts at Penny Stock Detectives, in conjunction with stock market guru George Leong, B. Comm., have just updated their breakthrough video, If You Missed Apple, Shame on Us; If You Miss This...highlighting a company these stock analysts believe looks very similar to Apple Inc. in its early days. To see the video, visit: http://www.pennystockdetectives.com/video/pt/index.php?sb=PRESS. [http://www.pennystockdetectives.com/video/pt/index.php?sb=PRESS]