The Ultimate in ‘Alternative Investing’: Food

 

When discussions turn to alternative investments and possible economic downturns, people typically start chattering about precious metals, venture capital opportunities, and non-standard types of real estate transactions. But as the 21^st century gets well into its second decade, and the economy gets more wobbly by the hour, scores of consumers are investing in “the oldest commodity,” food.

 

Putting your hard-earned dollars into a reliable food storage system makes sense, whether you are a family who wants to have a 3-month supply of meals on hand, a land owner who aims to store a year’s worth of food in an underground shelter, or an urban apartment dweller who shares space with other investors. There are even what we like to call “alternative commodities” investors, who buy massive amounts of dry foodstuffs, keep it in rented storage space, and then sell it when the price of that particular item goes up enough for them to make a profit.

 

History is a thoughtful teacher

 

Putting food away for a rainy day (or a financial apocalypse) is an idea as old as humanity itself. Ancient citizens of Egypt routinely kept perishable food buried in giant bins to protect it from predators and the environment. Greeks, Romans and early European civilizations did the same. Consider that artificial refrigeration has only been around for a couple hundred years, and before that, any food that wasn’t buried in salt pits or air-tight containers went bad in just a few days.

 

Sadly, we modernists have come to rely so much on electric refrigerators that the art of long-term food storage has been all but forgotten. Ask yourself, in the event that your community was without electric power during a prolonged national emergency, would you be able to feed yourself?

 

Forget Armageddon, what if the economy tanked and the price of food quadrupled overnight? Could you afford to feed your family? On a slightly happier note, what if the rate of “food inflation” rose to 20 percent? Wouldn’t it be nice to have a large store of non-perishables that you could sell at a tidy profit?

 

Those questions are what food investment is all about. The topic truly covers all the bases of survival, both physical and financial. The beauty of investing in food is that one need not be wealthy to take advantage of rising food prices and economic instability. For about $10 per week, virtually anyone can start a food investment program and begin creating a more stable future.

 

 

What are the options?

 

Unlike the traditional securities markets that use paper and cyber tickets to represent ownership, food storage enthusiasts sleep well each night knowing that their “investment” is gaining value as time passes, and is within physical reach, perhaps in a cellar, a backyard or in a nearby facility. Advocates of this type of planning are fond of saying, “Food storage is food investment,” and “You can’t eat gold and silver.” How can anyone argue with blunt logic like that?

 

{Note that the topic of long-term food storage is itself a separate field of science, complete with chemistry and engineering formulas that would make a math teacher weep. It is not our intention to describe all the intricacies of that discipline in this piece. But, we’ll certainly provide enough information so you can get started on a basic food storage and investment plan}.

 

Here are some of the ways that people can directly invest in food.

 

• Bulk storage of very large amounts:

 

Since the American Revolution, independent land owners in the U.S. have built under- and above-ground facilities to store massive amounts of food. In the 1800s, it was common for farm families to keep about a year’s worth of non-perishable foods in enormous underground casks and basements of all kinds. Some historians believe that the first residential basements were for the sole purpose of food storage!

 

After home refrigeration became ubiquitous in the mid-1900s, there was no need to store so much food, so the kitchen pantry took over the food storage job. A remnant of those olden days lives on in the common practice (in the Midwest U.S. anyway) of keeping a food freezer in the basement.

 

Home owners and farmers of the modern era are building underground shelters and erecting large sheds for the sole purpose of bulk food storage. The edible investments are sometime purchased from companies that specialize in such endeavors. Alternatively, some people just buy in bulk from retail food clubs and dry-pack the stuff themselves. Over time, the minimal cost of the storage facility is easily covered by the value of the assets it houses. A casual drive through “flyover country” in Missouri, Kansas, Oklahoma, and Iowa will reveal countless freestanding food storage units.

 

Before you commit to building a facility on your property, do some homework. Map out a purchase plan and detailed system for what you plan to buy, how long you want to store it, whether you intend to resell it or eat it yourself, and from whom you intend to buy the food.

 

 

• Home storage of a 1-year supply:

 

Keeping several months’ worth of food on hand is one of the most common ways that average consumers invest in their future. Even apartment dwellers can go this route provided they use their imaginations. Clearing out an extra closet or patio storage unit will usually allow for at least a 3-month cache of food.

 

Here’s an excellent resource for how to get started on the project. One of the huge advantages of this type of food investing is simplicity and cost. You don’t really need to buy any special equipment or rent additional space. You just use what you have and slowly build up a reserve of food each month.

 

The key is knowing what to buy and how to store it for long-term use. Nonperishable items like powdered milk and dry beans are ideal choices, but it’s best to make a detailed list of what you usually eat in order to calibrate the contents of the storage unit.

 

Remember that you’ll probably want to purchase some food-grade containers that are designed for long-term storage. And don’t forget two essential items that every food investor should have on hand: iodized salt and plenty of water. The iodine in the salt comes in handy for maintaining crucial bodily functions. Water will possibly take up the majority of your storage space, but don’t fret. It’s cheap, keeps for a very long time, and serves as a consumable, a cleaner and a cooling agent.

 

Keep in mind that a year’s supply of food is the best hedge against inflation, economic instability, job loss, and natural disasters. Electrical outages, floods and runaway inflation will no longer be a major threat to your ability to feed yourself and your family.

 

• Outsource the storage and buy from companies that specialize:

 

Some folks get serious about food investment as a means of short- and long-term profit. This type of financial maneuver is a variation on the traditional commodities market, but with a twist. There are many companies that exist for the sole purpose of helping investors buy and store huge quantities of diverse types of food, primarily grains, beans and oils. Those three lend themselves to long-term storage, are subject to volatile price fluctuations at times, and have large numbers of buyers and sellers in the marketplace.

 

You can pick and choose your favorite items to store, however, like sugar, honey, wheat flakes, and others. Most come in gigantic drums for easy storage at the broker’s facility. For example, as of this writing, a 275-gallon container of powdered milk costs about $2,700. Be sure to allow for storage costs in your budget as well, which typically are about $60 per year per 275-gallon container.

 

• Gardening for profit:

 

Maybe the simplest of all food investments is a home garden. These little money-makers can range in size from a tiny window box to a half-acre plot in your backyard. Let’s face it, anything larger than that is a farm! Levity aside, a carefully planned garden in the standard residential backyard can be a real money saver. Technically, this too is food investing, whether you sell your produce, eat it or store it for a rainy day.

 

Europeans have gardening down to a precise economic science. On a continent that is already short on land and wide open spaces, Europeans are known to be the world’s most frugal gardeners. For example, it’s not unusual for a large food garden in a Parisian’s backyard to generate an extra $1,000 of income in a given year.

 

Many who opt for the home garden as a means of food investment build their own greenhouses, get permission from local governments to plow the yard, and sometimes even obtain business licenses in order to sell produce at local farmers’ markets.

 

Food investment is one of the great American traditions, though the activity has branched out in recent years with the advent of outsourced storage facilities, better food longevity in airtight environments, and an incentive to fend off the instability of an uncertain future.

From our new contributor Larry