Just as it possible to extract energy from below the ground, it is possible to grow energy above ground. We have been covering the potential for ethanol to take share from petroleum products for some time now. This may be spilling over into the area of farm prices as well.

Patrick Barta in the Wall Street Journal notes some research that predicts a sustained move up in farmland prices. This is due in part to the potential increase in demand for so-called “dual use” commodities.

Another reason is that some agricultural commodities can be used for fuel as well as food. Sugar can be converted into ethanol while palm oil can be made into biodiesel.

When energy prices spike, demand for these and other “dual use” commodities rises, driving their prices higher. It also encourages farmers to devote more land to products that can be made into fuel, potentially reducing output of crops such as soybeans or wheat. So prices of those commodities can rise, too.

While much of the recent interest in ethanol is in so-called “cellulosic ethanol” the potential remains for pressure on farm prices and these dual use crops. While energy is obviously a major investment arena, there is an other alternative investment that is dependent on what grows above ground.

We have noted previously the attraction that timberland has on Wall Street. breakingviews in the Wall Street Journal noted a potential valuation disparity in the stock price of Weyerhauser (WY). Some investors want the company to monetize their timberland assets to as to increase shareholder value. The company, for the time being, is ignoring these entreaties.

In related news, The Guardian is reporting that wind power is rapidly becoming a fixture in the UK energy market. On a “lighter” note, the potential for “healthy bacon” makes our mouths water.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.