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Bull Market in Food : Rosenberg and Hendry on Ag
Rosenberg's note today mentioned the global bull market in agriculture. Which,as I recall, was becoming an issue pre-lehman. Inflation is just about the only thing stopping food prices from levitating once again. Trade balances, supply constraints, changing weather patterns, and emerging market demand continue to support a structural bull market.
Hugh Hendry commented back in 2010 (below) that unless there was a major recession in Asia, pressure on pricing would develop. As it stands, it looks like Asia will not avoid a collapse. However, if China pulls another rabit out of the hat - get ready to pony up at the grocery store.
The holdings in Hugh's Ag fund:
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At least wheat and corn keep the price level, but cotton was beaten down hard. The rebound should be nice:
http://federalreverse.blogspot.com/2012/03/cotton-will-be-place-to-be-ju...
btw Hendry has v little input into the Ag fund, its run by a gentleman called George Lee who is wholly agri-centric
Note that hendry is v bearish China in main fund and then saying potash will fly assuming no collapse in Asia - sounds like a natural hedge to me....he believes more in downside for China imo
Obama's crony-capitalist Amerika
http://farmageddonmovie.com
"Farmageddon"
interesting piece. It's the same war on small farmers that's fought against small businesses everywhere. Big Govt and Big Monopolists trying to kill small and medium sized competition
the battle to fight is against Govt, the ratchet we fund (paying taxes) to suppress ourselves!
Kill Govt and you kill all the crooks behind it
Wheat down 40% this year, corn down 30%, soybeans down 20%, rice down 30% and so on. All of this seems to have lots of more downside. Goldman Sachs warehousing business will probably go belly up next year. There just is such a staggering overabundance of everything that defrauding prices up is totally impossible.
There is a point...
One YoY data point isn't a long-term trend. Here's a reference (adjusted for inflation):
http://earlywarn.blogspot.com/2011/03/long-term-crop-prices.html
Clearly crop prices are low: keep in mind, however, that this is raw crops, not "processed." The recent trend, however, is up. I would expect that things will tend to migrate upwards to meet the more historical norm.
Unlike Hendry, I won't support that which I deem immoral. Big Ag is a trap and I don't have any intentions of promoting it for personal gain.
In the end food affordability WILL go up. Reversal of economies of scale.
THEY WON'T LET US EXPORT.
And I bet that bitch from Jersey who let her vagina be consolidated into the Rothies world has everything to do with it. I actually like that bitch. LADY WHAT?
I wonder how many of these pundits have any knowledge of how to run a farm?
I thought so...
If I stand on my roof I can see Canada, and I still have Tobacco growing in my yard, (WA). 11/22/11.
You cant eat it but some folk chew it, and if you smoke it, you will not eat so much, $10 will get you about 10 thousand seeds, legal to grow in every state (For personal use), but if the world tilts, a little stash of Virginia Gold could make you mighty popular in many circles.
I'm not advertising for anyone and have never used this provider, so I can neither recommend or otherwise, My point being, you can still grow your own, it is easy and available,
Virginia Gold Bitches, but i do like the giant leaf myself, and curing is not so difficult as portrayed by many.
http://non-hybrid-seeds.com/tob.html?gclid=CNyvjd2MzKwCFUwaQgodmHatrQ
That RT channel must love that chart.
You can stand everyone in the world in a lunch line in New Jersey and feed them. That leaves a whole of earth to grow the food for everyones lunch. The problem with food is not how much you can grow but how much you can put through the supply pipeline of a few multi-national, multi-billion dollar corporations TPTB have mistakenly allowed to monopolize the industry. Any food outside their business model is not allowed.
Engineering is not agriculture. Just because you can quantify something, does not mean it is possible to sucessfully accomplish that thing.
How would you move everyone to NJ so that they might wait in line? If everyone is in line in NJ, who is growing crops? You might want to rethink your initial premise.
Most of the world isn't suitable for agriculture as it is ocean.
Nothing is infinite not even agriculture.
I have this feeling that you missed cowsense's point- it IS about logistics in supply.
Corn, wheat and soy are favored because their shelf lives are good, good enough to allow food to be shipped around. Not endorsing anything here, just stating the logic as to why we have what we have.
Yes, there currently is enough to feed everyone. BUT... that is today, with today's environment and today's population. It's not a static world, though, and the trend is clearly not looking well.
The corporate model did some amazing stuff. Its BIGNESS, however, keeps it from being dynamic enough to meet the complexities that we will be facing: the Big Ship Syndrome.
Inflation is just about the only thing stopping food prices from levitating once again. Trade balances, supply constraints, changing weather patterns, and emerging market demand continue to support a structural bull market.
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Inflation doesn't stop rising prices-if anything it supports them-
The price of grain has dropped significantly over the past few months because of an oversupply from bumper crops-we have yet to see any passthrough to stores so far-but it will have to happen if supplies outstrip demand and affordability keeps falling out from under current prices -
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The U.S. corn supply is far larger than thought and a bumper crop could be on the way, the Agriculture Department said on Thursday in a report that shocked traders and shoved grain markets sharply lower.
Farmers defied expectations by planting significantly more corn acres despite rain and floods, and sky-high prices curbed demand which left June 1 stockpiles 11 percent larger than traders had predicted.
The dramatic turnaround from fears of bare-bones supplies could signal comfortable supply levels for the coming year and ease fears about high world food prices.
http://www.forexyard.com/en/news/Grain-markets-plunge-on-acres-stocks-sh...
http://www.barchart.com/charts/futures/ZWZ11
http://www.barchart.com/charts/futures/ZCZ11
http://www.barchart.com/charts/futures/ZSF12
That report was from July 2, you moron...
That report was from July 2, you moron...
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So smart man--
That's a whole 4 months ago-the grain price charts are now 10 hours old--about the same level as your adolescent brain capacity-
Get ready to pony up at the grocery store.
Huh...?
And...
Were not already. ????
I think you mean "Inflation " in food,NOT bull market,Thats Bullshit.
Soylent Green - It's People Dammit!
That chart's flipping you off, fellow former middle class USAmericans.
Grow your own bitches
My Farmer's Almanac says that you cannot expect more than one calf from a heifer per year, no matter the leverage or the derivative. Nobody at Wall Street has found a financial formula to extract more livestock from the same amount of head in the herd.
Also, the crop yield on the fields is at capacity.
Yet, more people on the planet require more carbohydrates, proteins and vitamins.
I'm betting the farm.
unfortunately, with increased aerosoling of aluminium, etc. the soils (and water) are becoming increasingly toxic - the future may well be aquaponics & greenhouse gardening, "small scale independent" as geekgrrl mentions.
of course, Monsanto is already patenting their "aluminium resistant" seeds. . . hand in glove with the globalists agenda.
*and what billsykes sez.
Yes but our financialized world turns everything into bubbles which collapse, rather than allowing natural supply and demand to work. It's staring at you in the face in that chart.
In this case, rapidly rising food prices kill the economy, because people have to eat but they can't spend on anything else. If food prices rise high enough, starvation ultimately ensues, and demand falls.
You can't have a functioning global industrial economy with perpetual commodity inflation. It's game over, folks.
I don't see anything other than gold and silver to invest in in this environment. Maybe choice land and small farms. And of course survival gear.
fuck monsanto cocksuckers
Monsanto, Syngenta, and ADM? Yuck.
No doubt ag has excellent long-term potential, but the practices of the above three firms really don't have a future in a post-peak world. The reality is that conventional/pesticide/GMO yields are going down, not up, pesticide resistance is developing, and superbugs are developing in the trashed soils, while at the same time, organic ag is seeing a high growth rate, superior yields, and better soil health due to the fact that the soil microorganisms aren't nuked with chemical herbicides.
Small scale independent farmers is the way to go, and most of the younger generation of farmers want to do it on a smaller scale.
Yeah, the small farmers have made a "killing" the last 35 years.
Little girl, who exactly do you think those multinational Ag giants bought/possessed their land from??? Hint: The answer is not in Grimm's fairy tales or Vogue mag's special environmental issue.
geekgrrl----Go back to Teen mag's special Vampire blog before my eyes roll so far into the back of my head they come off the axis.
The last 35 years has been an aberration created by cheap energy and fertilizer, but those days are coming to an end. When there are plenty of people but no fuel, either we will have slavery (again) on farms or we will have large numbers of independent growers/producers. I prefer the latter choice and have been actively working in this direction for the last six years.
Spare me the little girl ad homs. I AM a small farmer and have been paying very close attention to food markets for years. I'm seeing a dramatic shift to locally-sourced food, and increased demand for organic food. Maybe you live in Iowa or something, and can't contemplate a more meager existence doing farmer's markets and selling to local shops, but where I live things are looking brighter every day for small food producers.
I don't mean to put you down at all, but in the reality that I live in, underlying fundamentals are becoming increasingly less important than your ability to kill the competition. In that post-peak world, will we have more or less government intervention in our lives?
If you look at a company like Monsanto, it's just another tentacle intent on squeezing the life out of us, and as such carries a lot of weight with TPTB. Considering the influence they have on legislation *cough Food Modernization Safety Act etc etc cough* any bearishness would be better directed towards the future health of our children.
Of course that doesn't mean I'd ever go long Monsanto. I'll continue to support my local urban ag movement and hope those Monsanto fuckshites choke on their own poison.
Without any doubt, we are at or near peak government. You think government control is going to increase in the face of declining energy supplies? Maybe it will for a few years as TPTB make a last grasp for power, but once the real slide starts to kick in, the empire will lose the ability to extract tribute from the periphery and everything will come crashing down. Our planet is one big fermentation vessel full of humans drunk on high octane energy that is about to go into serious decline.
As for Monsanto, as far as I'm concerned, they are the modern personification (corporate) of pure evil. Their pollution of multiple crops with GMO pollen is a tragedy of the highest order. Sometimes I feel like modern people live too much inside abstractions and models, but the reality is that the underlying fundamentals of the natural world are being attacked. Whether by nuclear, chemical, or biological agents, we have been attacking the planet as if it were an enemy. That can only go on for so long before it comes back to bite us. What an irony that most US consumers unknowingly consume large amounts of "substantially equivalent" foodstuffs, as opposed to, you know, food.
"In that post-peak world, will we have more or less government intervention in our lives?"
Will We have More or Less Intervention in Our Lives?
Really, since it's "We The People" that's how it really reads. Anyway...
The question is whether we will be able to have more dynamics in our systems. Since BIG, which currently controls most everything, requires cheap energy, and since cheap energy is becoming a thing of the past, BIG is going to FAIL.
History is about ebbs and flows. Since we're still standing on the same shores that our fore-bearers stood on it's about viewing things in a more historical context. Today, the past 100 years or so, is a total anomaly in history's annals. The question that you ask has answers in the Mean...
Its a fuckin Ag fund, of course its top holdings are all Ag names. I would like to know his Ag positions relative to his other positions in his flagship fund. And also, Monsanto would definitely not be my top pick in the Ag space.
or think MOO
also ..Bunge Limited is great company
Oh, come on. 7 billion mouths to feed. Obvious.
Some unpopular thoughts on over-population, from 'The African Population Disaster' by Canadian journalist (Mr) Gwynne Dyer:
« ... much tutting and shaking of heads over its prediction that we will be ten billion by the end of the century. But almost nobody will have the temerity to point out that this is almost entirely an African problem ...
The United Nations Population Fund’s own numbers tell the story. Africa currently has one-seventh of the world’s people: just over one billion. But during the rest of the century, the UN agency predicts, this single continent will add an extra 2.6 billion people, more than tripling in population, while all the rest of the world adds just half a billion. ...
If it weren’t for the African population boom, the world’s population would never exceed 7.5 billion. »
http://gwynnedyer.com/2011/the-african-population-disaster/
It's not human numbers, it's TOTAL human consumption.
The US population as expressed in Bangladeshi per capita consumption is 3 Billion.