Is a food manufacturer the right place to invest?

In last week's National Business Review, editor in chief, Nevil Gibson talked about the prospects for food manufacturer, Goodman Fielder. While his piece, 'A procession of exhausted, good men' explores the trials and trevails of the company I was also interested in his inference that to take advantage of the food boom, you need to invest in a food company:

"A global food shortage and rising demand - the world population is increasing six million a month and predicted to reach nine billion by 2050 - should make companies supplying that need a no-brainer for share investors." Click here to read full article

In a global food shortage, investors also need to bear in mind:

1. Food processors and marketers are margin traders
2. The "boom" that this article refers to is putting upward pressure on commodity prices - the raw ingredients used by Goodman Fielder. In a world that is generally struggling economically they may find it difficult to pass on increased costs
3. Isn't the ultimate beneficiry from the commodity boom farmers? (through operating profits) and land owners? (through land price appreciation).

In summary, Goodman Fielder is probably a very good company but if an investor wants exposure to "the global food shortage" then buying a farm (or a piece of one) might be the best approach.