Most farmers are happy again. Thanks to rising prices for corn, wheat and cotton, farm profits are starting to look attractive again. Many analysts speculate that farmland and related agricultural assets are in their own bubble. That may be the case in certain areas, but the fundamentals of farming and agricultural look rather bright, relative to other areas.

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As Basic As Food
There is nothing sophisticated about the value of farming and agricultural. Farmers provide the world with the basic staples society needs. Whether its rice, wheat, or corn, each provides essential animal feed for farmers' livestock. While headlines today are appropriately focused on the jobless rate, deficits and housing, don't forget that the there are hundreds of millions of people all over the world who are working hard for a better way of life. Part of that lifestyle is a diet upgrade that includes more protein and a wider variety of vegetables. Over the long term, that scenario reveals a sunny forecast for agricultural and farming. That's not to say that the industry won't have its bumps. It most certainly will. Just look back at 2008 and 2009 and what the collapse in agricultural commodity prices did to farmer economics. (For more, see 5 Agriculture Stocks To Grow With.)

A Long-Term Bet
Patient investors may want to consider businesses that support the long-term trend that favors farmland and agricultural production. A close pure play on farmland is Argentina's Cresud (NYSE:CRESY) an owner and operator of some of the most fertile farmland in Argentina, Brazil, and other Latin American regions. Cresud's farming activities produce corn, soybeans, milk and beef. In addition, the company owns a majority interest in IRSA (NYSE:IRS), a leading real estate development company in Argentina. To be sure, Cresud's shares have benefited from the bullishness in the sector. Shares trade at 52-week high of $19 and 24 times earnings. But don't let the P/E ratio be the determinant of value here. If demand for crops remains strong, Cresud's profit should swell over the next quarter.

A more speculative bet at this point would be retailer Tractor Supply (Nasdaq:TSCO), a specialty retailer catering to the farming and ranching lifestyle. Even so, at the current share price of $46 - an all time high for TSCO - the company is still being valued at one times revenues.

A large cap that looks cheap is Archer Daniels Midland (NYSE:ADM) trading at 11 times earnings and paying a decent dividend of 2%. ADM is a transporter and processor of agricultural commodities, among other things. ADM's business is vital to a robust agricultural market.

The Bottom Line
Investing, like farming, is most successful when handled with care and given ample time to bear fruit. Betting on the farming industry today should be selective and opportunistic and made with a long-term orientation in order to reap the most from what you sow today. (For more, see America's Biggest Food Companies.)

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