Agricultural

Society relies on agricultural commodities to feed and clothe the world’s population and play an important role in the economy as well as the financial markets. Unlike other commodities, agricultural commodities (grains and oilseeds, dairy, and softs) have unique characteristics that may include seasonality, perishability, and production dependent on weather conditions. Further, these products are an important part of international trade and are crucial in providing food security to ensure a stable supply of food worldwide. Financial investments within the agriculture industry have increased over the last several decades due in part to the commercialization of food production, the introduction of agricultural commodity index funds, and the increased investment in futures markets. This chapter introduces the major agricultural products, discusses price determinants and how to invest in agriculture, and highlights the differences between agricultural commodities and other commodities.