Is having a vegetable garden the next new selling feature of real estate?

by Michael Arbow MBA

Partner, RSD Solutions Inc.

www.rsdsolutions.com

info@rsdsolutions.com

Traditionally, at least in the Canadian real estate market, the selling features of a residential property have been the re-modeled bathroom, the finished basement or the double car garage.  This may be about to change.  In a recent Globe and Mail article (http://tinyurl.com/2bajowt) the news for both wholesale and retail consumers of food stuffs is bad and worse.  From the charts and the fundamentals the outlook for food prices seems to be unidirectional and that is up.  In December of 2010 the United Nations’ Food and Agriculture Organization global food price index hit a record nominal high, exceeding the pre-crash peak of 2008.  The results are being felt in emerging economies with food riots recently in Algeria and according to many media sources expected to spread to other countries over the near term.  In 2008, rapidly rising food prices led to government collapses and restrictions on exports of domestic supplies. 

For the retail consumer, where possible, they can reduce their risk of higher prices by planting a garden - hence the new selling feature in real estate.  Unfortunately for many large food processors this option is not available to them; their risk management strategy must be financial.  The outstanding question for these firms is:  Will the current risk management procedures work in the “new” normal?