User 305589

The Agriculture Re-Boom Is Coming

that should read 800-1.000 calories, of course


On May 27 04:25 AM User 305589 wrote:

> Yes, iwant to correct at least one item:

The Agriculture Re-Boom Is Coming

Yes, iwant to correct at least one item:

> 4. Americans eat more than 2X the amount of food on average as required.

The 'normal' civilized Western society human being eats already about 3-4 times as many calories (and drinks way too much, too)as would be required - most of that is due to way way too high intakes of meat. So for an average American the figure easily comes to 6-8 times. You can easily live from 800-100 calories a day - privided you eat the right food (natural, as little processed as possible, no meat) along with an overall healthy way of life. The 'civilized' mankind is moving farther away from that every day.


On May 26 11:52 PM Dirk McCoy wrote:

> Here are a few things I've read, feel free to correct me:
>
> 1. Only 15% of arable land in Africa has been utilized, and the breadbasket
> of Russia is massively underperforming;
> 2. Hydroponics can produce 2-20X yield using only 5-10% of the water;
>
> 3. All the energy required to power the US can be generated in a
> 100 x 100 mile patch of Nevada (adios, ethanol);
> 4. Americans eat more than 2X the amount of food on average as required
> for adequate health;
> 5. Milk is at a lower price now than 50 years ago, and some farmers
> are slaughtering their cows and pouring milk on the ground;
> 6. The cost of grain in a $3 box of cereal is about $.15.
> 7. Increasing CO2 has the effect of fertilizing corn and other plants.
>
>
> I won't deny that agricultural output must grow with population growth
> and as hundreds of millions rise above poverty levels, and that profits
> could rise, but given the facts above, I really don't see the word
> "crisis" applying to this situation, unless you consider strong growth
> and earnings in an industry a "crisis".

The Agriculture Re-Boom Is Coming

Interesting article, Andrew, but unfortunately, you stop where it starts getting interesting. You present the bullish case for Ag-commodities but imho you do not think the idea through in earnest.

Sadly, if a really big shortage were to occur, it could create a very tough and painful situation. If really big shortages develop (or it becomes clear that they inevitably will occur) then you will see a rush to vehicles like DBA. Since DBA invests directly in ag-futures, this could lead to additional (speculator) demand worsening an already dire situation. I fully expect that the govt will ban and outlaw DBA sooner rather than later in this case.
What they can't outlaw as easily are the agricultural futures themselves - though in an emergency they may prohibit retail and institutional speculators from opening new positions in crops.

Then what? fertilizer stocks or farming equipment will certainly get a good uplift - but when there is a drought or a flood, all fertilizers and caterpillar machinery in the world won't save your crops. And you can only extract so much additional output with ever increasing quantities of fertilizers. (Which, btw, already are way too much in use. The quantities of our food are high, but the quality, from a nutritional and biological point of view keeps declining rapidly. And no, genetic manipulations are not part of the solution, but creates a lot of new and related problems)

Farmland has its own host of problems. Ask anyone in Alberta or Sasketchewan. Pure farmland investments are not the easy road to riches. many who thought otherwise, have learnt a very costly lesson over the years. And farmland in Argentine looks cheap, but carries a boatload opf political risks.
perhaps you could elaborate more on your views of how to invest here - and not just present the bullish background story. But I guess, Andrew, the meat will only be available to your subscribers (what I respect) and your articles here are just teasers to sell your newsletter (wat I don't endorse)

Dennis Gartman on Gold, Oil, Government and the Economy

The guy is way overrated. His remarks regarding oil are hillarious. on the one hand, he -correctly - figures out that you cannot trust OPEC's pumping statistics and their cut-announcements. But this doesn't stop him from believing their absolutely unproven resource claims! Even though they form the basis for the individual countries' quotas - which means they have every incentive to report their resource base as high as possible. Go figure. Yes, we have a lot of crude next to Brazil or in the tar sands. right. it just costs awesome amounts to drill and proceed those supplies.
others have commented on his silly debt comparisons so no need for me to dwelve on those again.