Understanding commodities also allows you to understand the world around you. For commodities are found around the world, it influences the governance of the country and equally important how and why the commodity price moves up and down.

In the book Gold, Oil and Avocados by Andy Robinson, published by Melville House, Brooklyn, New York, 2021 the author focuses on Central and South America’s economies through commodities.

Advertising works and advertising in the Super Bowl can work very well. In February of 2017, 278 million avocados were sold to be eaten during the Super Bowl game. In 2007, both California and Mexico produced the Hass variety of avocado, by 2020, 80% of the avocados consumed by US consumers came from the Michoacan area of Mexico. The demand for the avocadoes has transformed the area from 3,000 acres under cultivation in the 1960’s to over 180,000 by the early 20th century. The big issue is water, the trees that grow the avocados need a great deal of water and the water table is falling in Mexico. The alternatives are orchards in Columbia and Peru are expanding.

In Brazil, one of the biggest agricultural exports is Soybeans, it also happens the US is a big grower of soybeans. The number one customer is China and China has moved the US off the top of the list to Brazil. Soybeans are used for feed for pigs and chickens, and soybeans are shipped to Spain in Europe which has the largest pig and chicken factory farms. The interesting aspect is the grain terminals are operated by the big grain companies including Cargill of the US, ADM of the US, Bunge of St. Louis and Geneva, Switzerland and Louis Dreyfus of France.

Beef cattle is been a growing industry in Brazil with 85 million head of cattle which is more than the US and Australia. One of the biggest meat companies is called JBS and one of the many ranches has over 150,000 cattle. Most of the ranches are what used to be the Amazon Rain Forest or as one hotel clerk said, the rain forest starts to the west of us. As the trees are replaced, the land is used for cattle raising and soybean farming.

President Trump calls the Gulf of Mexico the Gulf of America and among other things it is blessed with is oil. In Venezuela, they have enormous store of heavy oil which similar to Tar Sands in Canada has to extracted from the earth and then becomes oil to use. The problem for oil refineries is they have to be specialized in heavy oil and there are refineries in Houston and in China. For heavy oil, the price of oil has to be about $55 a barrel, when it goes below, activity slows down to a trickle. Offshore of Brazil, Mexico and Guayana are huge oil fields but once again the price of a price per barrel has to be high because the floating oil platforms are very expensive to build, maintain and move oil and gas once it is found in commercial amounts. All the major oil companies from around the world are active in the Gulf of America. This leads to what is America’s interest and what will America do to protect its interests and be aware sometimes governments change.

Linking to dividend paying stocks, many investors own shares in commodity companies, for example ever since Standard Oil became ExxonMobil and it has been a dividend paying company and it reliably pays a dividend every quarter. As investors you focus on the results of the company, how it does its business is for others to be concerned about as long as it is legal, but in reality, there is a footprint that is made. How big it is and how it is overcome, that may be left to greater minds.

There are more questions than answers, till the next time – to raising questions.