This week sees the release of the September quarters CPI figures. If recent inflation trends in other countries are any sort of guide, then you can expect a big jump is ahead for Australian consumers. Australia’s inflation rate has risen from 1.1% in Q1 2021 to the current rate of 3.8% in Q2 2021. We saw the markets spooked when New Zealand’s CPI rose 2.2% in the third quarter (beating expectations and moving at the fastest pace in over a decade) and annual inflation surge by 4.9% also the biggest movement in over a decade. As a result, the New Zealand RBA increased rates.

The agricultural sector has demonstrated both resilience and growth during the pandemic. According to the UN Food and Agricultural Organisations (FAO) monthly Food Price Index, global food prices (Sept. 2021) have grown 33% from the past year reaching its highest levels since 2011.

On the whole, equity markets continue to trade at extraordinary valuations,  how ESG commitments promised across the ASX 200 are to be delivered is yet to be seen.  On the cusp of the world’s most important climate policy conference finding investable solutions to our climate and biodiversity problems are rare indeed.

Finding a ‘safe haven’ defensive asset class with long term tailwinds and real ESG credentials offers particular attraction to today’s investors as the focus on climate mitigation has never been stronger.

Farmland is a proven inflation hedge whilst also offering real and scalable climate mitigation capabilities.  The 20-year CAGR right across rural Australia is 7.6% far out-performing Australia’s long-term inflation rate of 2.46%. The world’s largest agribusiness lender, Rabobank produces an Australian Rural Commodity Price Index. The index has shown that Australia’s major agricultural produce markets have grown at around 6.5% p.a. for at least the last 11 years. Kilter’s track record of managing carbon positive farmland assets, generating real and measurable biodiversity impacts alongside markets rate returns places it in the top tier of managers in this asset class. Kilter’s Australian Farmland Fund remains open to investors until Dec 2021 offering inflationary protection and genuine environmental impact. Email for more information.