Global Food Supplies Threatened
A number of organizations warn that changing temperatures and other global factors are contributing to a worldwide depletion of food supplies.

As food reserves disappear, costs have skyrocketed. Director-General of the Food and Agricultural Organization (FAO) Jacques Diouf cautioned the United Nations on global food security. With rising transportation costs choking food shipments to developing nations, starvation for more of the world’s poor appears just over the horizon.

Climate specialists at the Commonwealth Scientific and Industrial Research Organization in Canberra, Australia, claim the average temperatures of many Third World nations are rising, affecting local agriculture.

An increase of only one to three degrees Fahrenheit could result in widespread blight, or traumatic conditions such as drought, hurricanes or floods. These events would severely inhibit “traditional” growing techniques. Since farmers depend on good weather for their crops, they would be defenseless against a drastic change in local climate.

Josette Sheeran, executive director of the World Food Program, said in a telephone interview that the cost of providing food for the program has doubled in the last five years. With the rise in oil prices, ship transportation costs also doubled. This has limited the ability to provide food for countries where shortages are imminent. As Ms. Sheeran explained, the world’s poor are being “priced out of the food market” (International Herald Tribune).

A 2006 report released by the FAO estimates that 854 million people will be at risk of starvation and malnutrition, with 820 million of those from developing countries.

Since technology allows flexibility in addressing food shortages, climate change has less effect in modernized nations such as the United States, Britain and many countries in Europe. These nations use genetically modified crops, which resist high temperatures. Europe is planning to use its economic leverage to remove taxes on grain imports in January to ease the cost of domestic cereals, which will adversely affect nations with weak economies.

In the United States, farmers are shifting from growing food-grade corn toward corn used in biofuels, which is also contributing to food shortages. The lucrative subsidized sale of ethanol has attracted farmers who are looking to make a profit. Although the American government has made little progress moderating this “exodus,” Europe has made strides by setting low target budgets in their biofuel subsidies, allowing farmers to garner a small profit by selling to the government.

Most suppose that a global food shortage crisis is impossible. In response to this common misconception, Francesco Tubiello of Columbia University said, “Many people assume that we will never have a problem with food production on a global scale, but there is a strong potential for negative surprises.”

Global food catastrophe may be impending food shortage
January 10th, 2008 -
Washington, Jan 10 (ANI): Strategists have warned that the world is seeing the emergence of a new crisis - a global food catastrophe, that will reach further and be more crippling than anything the world has ever seen.

A report in ENN (Environmental News Network) has stated that the credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to the scenario of acute food shortage.

Donald Coxe, global portfolio strategist at BMO Financial Group, explained the reason for this impending disaster.

According to him, the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India, as well as heavy demand from the biofuels industry.

This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

“You’re going to have real problems in countries that are food short, because we’re already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they’re embargoing exports,” said Coxe, citing Russia and India as examples.

The solution to this approaching problem is the importance of expanding the food output.

“The greatest challenge to the world is not US$100 oil; it’s getting enough food so that the new middle class can eat the way our middle class does, and that means we’ve got to expand food output dramatically,” Cox told ENN.

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.
But, according to Coxe, this surge would begin to show in the prices of consumer foods in the next six months. (ANI)

WORLD food security has slumped to its lowest since records began in 1960, with a marked decline in grain stocks.

Just 50 days of grain supplies are available compared with 115 in 2000.

Julian Cribb, from Sydney's University of Technology, said the oil and credit crises rattling world economies were nothing compared to the threat from emerging global food shortages.

Food prices have risen steeply over the past two years and farmers last week warned the cost of basic items such as bread, milk and meat would jump again this year, mainly due to soaring commodity prices. "Year on year, humanity now eats more than it produces," he said.

And the need for protein, especially from China and India, was growing faster still with demand expected to more than double by 2050.

"Cities are now taking much of the water that was used to grow food, while ground water levels are falling in every country where it is used for food," he said.

"We are losing land. We are building on it, eroding and degrading it or locking it in conservation reserves.

"By 2050 we will have to feed the equivalent of 13 billion people at today's level of nutrition," he said.

Korea Suffers Soybean Shortage

Korea is feeling the pain of the global grain crisis. For some time, small tofu makers have been having trouble operating their factories due to rising soybean prices. Now some are letting their factories idle because they can't get soybeans at all, no matter how much they are willing to pay.

Large businesses have yet to have problems purchasing soybeans, but they are also complaining about rising costs. Consumers haven't been exempted from the pain, either -- the market price of soybeans has almost doubled that of last year. <br>
<br>
The Korea Agro-Fisheries Trade Corp. failed to import a planned 21,000 tons of soybeans late last year. A Chinese exporter broke a contract with the corporation last August to sell soybeans for US$495 a ton even though it had to pay a penalty. The trade corporation had to place an order for soybeans at $630 a ton with another trader.

Although it has not drawn as much attention as wheat, corn and rice, soybeans are at the center of the recent "agflation", or agricultural products inflation. The trading price of soybeans at the Chicago Board of Trade has been rising steadily, from $5.25 a bushel (27.2 kg) in October 2006 to $7.35 in January 2007 to $12.64 this month. This has caused the import price per ton paid by the Korea Agro-Fisheries Trade Corp. to increase from $330 in 2006 to $378 in 2007 to $690 currently. A supply shortage is part of the problem.

The biggest reason for the rising prices of agricultural products is soaring demand in China and India. Their economies have grown rapidly, causing demand to grow, while yields have fallen due to serious weather conditions. Another reason is that farmers have started to replace soybean crops with other grains as high oil and fertilizer prices have increased production costs, and alternative energy sources made of grains like ethanol and bio-fuel have become more popular.

Speculation funds are flying into the grain market. Yoo In-taek, a manager at Pulmuone, which runs a soybean farm in China, said, "Even China is importing soybeans from the U.S. because growing demand has lowered the soybean supply. As a result, the Chinese government announced that it will impose grain taxes to control exports of soybeans to other countries." Korea needs to come up with long-term measures to secure grain without difficulties, he added.

Malaysia to Stockpile Staple Foods to Avoid Shortage

By Soraya Permatasari and Manirajan Ramasamy

Jan. 24 (Bloomberg) -- Malaysia, the world's second-biggest palm oil producer, plans to stockpile cooking oil, rice and other essentials to safeguard supplies and stabilize prices that have surged to records globally.

An agency called the National Stockpile will be set up under the National Price Council, Deputy Prime Minister Najib Razak told reporters in Putrajaya, outside Kuala Lumpur, today.

Malaysia, like China, caps prices of some everyday commodities to contain inflation after wheat, soybeans and palm oil soared to their highest ever. The country's inflation probably reached a 10-month high in December as food costs surged and floods disrupted supplies in parts of the country, a Bloomberg News survey showed.

``This buffer stock is to make prices stable,'' said Mad Nasir Shamsudin, professor of agricultural and resource economics at Universiti Putra Malaysia in Selangor. ``Without subsidies, there's no way we can go against price increases.''

India, China, Indonesia, Thailand and Malaysia are among countries that have sought to control food prices to curb inflation and avoid social instability. Thousands of tofu and tempe producers rallied in Jakarta on Jan. 14 to demand the government lower soybean costs.

China froze energy prices this month, tripled price-fixing fines and added curbs on increases for meat, eggs, cooking oil and noodles. India cut the import tax on edible oils four times last year, and limited exports of rice, wheat, corn and lentils.

Cooking Oil

A cooking oil shortage in Malaysia forced the government to flood the market by raising supply to 70,000 tons in January from a monthly average of 55,000 tons in 2007.

Prime Minister Abdullah Ahmad Badawi may meet the National Price Council Jan. 27 to decide how much money will be allocated and which items will be included, Najib said. The proposal won't reduce palm oil exports, he said. Malaysia and Indonesia supply almost 90 percent of the commodity.

``The government wants to ensure a proper supply of essential items and the stability of prices,'' Najib said. ``This is a policy shift. We have yet to work out the details.'' He declined to say if fuel will be included in the plan, adding that most of the items will be ``non-perishable goods.''

Palm oil prices climbed 64 percent in the past year and reached a record Jan. 14. That may have driven some producers of cooking oil, a controlled item in Malaysia, to hoard supplies and hold out for a higher price, Minister of Domestic Trade and Consumer Affairs Shafie Apdal said Jan. 7.

To contact the reporter on this story: Soraya Permatasari in Kuala Lumpur at soraya@bloomberg.net

South Africa - Wheat Shortage is the Real Problem
Lauren Cohen Published:Jan 19, 2008

The soaring wheat price is to blame for bread price increases, with farmers battling to produce enough ‘‘white gold” to meet local demand, industry stakeholders said this week.

The Chamber of Milling, which represents about 95% of South Africa’s wheat producers, said wheat prices had risen from less than R2000 a ton last January to R3100 a ton this month.

Chamber executive director Jannie de Villiers said the increase was based on economic factors and that bakeries would be forced to increase prices up to 75c a loaf in the next six months to keep up with wheat price increases.

“The South African crop is 1.8-million tons and we mill 2.8-million tons, meaning we must import a million tons at prices between R3600 and R4100 a ton,” he said.

He said that a wheat price of R2300 a ton equated to a retail bread price of R5.75 for a white loaf.

De Villiers said that wheat stocks globally were at a 40-year low, with prices at a 40-year high.

“Wheat farmers in the Southern Hemisphere have had a poor season, so demand is higher than supply. Europe is using wheat for biofuels, which also drives demand for it. Some farmers have switched to maize since the price of it has risen — maybe now they will switch back to wheat,” De Villiers said.

“People in the emerging markets of China and India are eating more meat, which has substantially increased the demand for animal feed.”

He said five years ago it cost 20 a ton to transport imported wheat.

‘‘But for the past year it has been 90 a ton, which means an extra R500 a ton added to the freight price — this should have meant an extra 30c per loaf months ago.

‘‘It is also difficult to charter ships to come to South Africa as they are all going to China. Trade unions say the government must control the bread price, but how can you control the international freight price, and the weather in Australia?

“Food prices are about affordability and availability. Right now we are battling with affordability and the government could assist with tax rebates,” De Villiers said.

The Western Cape and Free State are the two major wheat-producing areas.

Nico Hawkins, industry services manager for Grain South Africa, said wheat prices had risen between 50% and 70% in the past year, depending on when farmers sold their crop.

“South Africa’s crop decreased from 2.5-million tons in 1997 to 1.77-million tons last year. As a result, imports have increased in the same period by 25%,” Hawkins said.

Pakistan faces wheat shortage

Musharraf says he will use the Pakistan military to solve the problem of wheat shortage (GALLO/GETTY)

Political turmoil has deepened Pervez Musharraf's unpopularity in Pakistan.

However, flour shortages and rising food prices may well be the most pressing issue for Pakistanis before next month's elections.

They may even overshadow concerns about violent attacks that have rocked the country.


Pakistan is running short of flour which is needed to make bread.


A government decision in early 2007 to export a half-million tonnes of Pakistani wheat, after it over-projected the national harvest, has contributed to the shortfall.

This is prompting fears of further instability in the country.

Belated import

To cover the shortfall the government has resorted to importing wheat from Australia and Russia at 70% higher prices.

It is now being criticised for not preventing the looming crisis.

Pakistan is a nation of more than 160 million people who consume 22 million tonnes of wheat every year.

Part of the reason for this crisis is due to frequent power cuts that have badly affected industrial production of milling wheat into flour.

This has been coupled with the ongoing political turmoil in the country that has caused logistical difficulties.

Flour shortages have caused riots in Pakistan in the past and sensitivities run high whenever there are shortages.

The crisis has now prompted the government to increase security at the mills and secure the country's vital food supplies.

It has deployed rangers and other paramilitary forces to guard mills and storehouses that hold stockpiles of wheat.

World shortfall

The problem is not entirely of Pakistan's own making - there is a poor harvest of wheat across the world.

Speaking to Al Jazeera's Kamal Hyder, Sheikh Muhammad Shabbir, a former chairman of the Pakistan Flour Mills Association, said despite the world shortage, the problems in Pakistan could have been avoided.

"In this year, [the] 2007/2008 crop, what we saw in the world is that grain, especially wheat grain, is short everywhere," he said.

"That is another reason that the prices in the international world market went up because of the shortage of wheat".

Pakistan had a bumper crop last year but instead of holding some of the wheat in storage, it exported much of the excess.

Shabbir says this was a mistake.

"The prices in the open market of wheat started going up. So we thought that the decision for the export of wheat at that time before knowing the actual size of the crop was not correct," he said.

Blame game

Reports from Pakistan say opposition parties are staging rallies against shortages and blaming the government for the crisis.

The government, in turn, has established a special federal committee to review the wheat flour situation and to ensure that store owners do not sell more than the government specifies.

The utility stores have been selling flour at the official rate of 18 rupees ($0.30) per kg but it is sold in the unofficial market at around 30 rupees per kg.

Musharraf has blamed smugglers for the problem saying the shortage was due to wheat taken to Afghanistan, Central Asia and Russia.

He says he will use the army to solve the crisis and on 15 January media reports said Pakistani border force did not allow trucks to pass the border checkpost of Chaman.

Musharraff says the flour crisis is artificial but political experts warn that despite the shortages, Pakistanis must see tangible evidence on the ground.

Otherwise, the people fear that anger and hunger could escalate into further violence on the streets.

Global Food Shortage

I want to bring the developing global grain shortage to my fellow VMC'ers attention. There will be more and more press on this developing crisis as the year unfolds.

Here are the numbers:

Global Farmland Under Cultivation (millions of hectares):
........................1998 -1999 -2000 -2001 -2002 -2003 2004 -2005 -2006 2007
Area (hectares) 686.3 670.4 666.0 666.8 653.8 664.2 667.9 671.8 668.4 684.7

As you can see from the numbers, despite the growth in crop prices, the same amount of land that was under cultivation 10 years ago is being farmed today.

Total Global Grain Stats for the past 10 years(millions of tonnes):
Production (metric tons) 1,875 -1,872 -1,842 -1,874 -1,821 -1,861 -2,043 -2,016 -1,991 -2,077

Consumption (metric tons) 1,836 -1,867 -1,863 -1,905 -1,914 -1,947 -1,994 -2,031 -2,045 -2,096

Ending stocks (metric tons) 579 -584 -563 -532 -440 -355 -403 -388 -335 -315

As you can see from the numbers consumption has risen above production and inventories are nearly HALF of what they were 10 years ago.

Enter the Bio-Fuels initiative/mandates and what they will consume and you can only come to one conclusion......Global Grain Shortage!

It should also be noted that North America has not had a dramatic weather event for 16 years running. Any major drouth will have a devastating impact.

I will post recent articles I have found describing the early signs of what is coming. It has been a long time since anyone worried about cheap and abundant food.

Kipp

Jim Puplava - "PRECIOUS METALS PORTFOLIO"???

Does anyone have any idea what Jim Puplava owns in his "PAM" account?

Here is the link that describes the account:

http://www.puplava.com/investmentservices/accounts/premierasset/preciousmetals.html

I would like to look at the Jr's he is in.

Thanks!

Kipp

Donald Coxe Radio Call

http://events.startcast.com/events/199/B0003/#

Banks are pissed at Coxe for "Year of the Rats"!

Kipp

Donald Coxe Radio Call

http://events.startcast.com/events/199/B0003/#

Banks are pissed at Coxe for "Year of the Rats"!

Kipp

Donald Coxe Radio Call

http://events.startcast.com/events/199/B0003/#

Banks are pissed at Coxe for "Year of the Rats"!

Kipp

The automakers must have platinum for pollution control.

Get long Oil, Gold/Silver, Ag/Fertilizer folks. The world is still turning and the bull in commodities is going to stampede anyone standing in the way. Interest rates are low, there is a blizzard of cash coming from ALL central banks. The B.R.I.C. economies are still on fire. World grain inventories are at all time lows, and we are going to burn our food so we can cruise our S.U.V's. Oil field production is in decline for the major fields. Buy small high growth oil drillers. Listen to Don Coxe, Jim Puplava, T. Boone Pickens, they have been right.

Riding the commodity bull!

Good Luck!

Kipp

Thanks Hank!

Anyone have a platinum producer not in South Africa?

Kipp

S.African Power Crisis Halts Gold, Platinum Mining
Fri 25 Jan 2008, 12:01 GMT

JOHANNESBURG (Reuters) - South African gold producers and the world's biggest platinum miner suspended production at all their mines in the country on Friday due to a power crisis, helping send precious metal prices to new highs.

Shares in most of the affected firms dived as the government said the power cuts that have darkened homes and hurt businesses in Africa's biggest economy were "a national emergency".

AngloGold Ashanti, Gold Fields, and Harmony said they had stopped all gold mining after they were informed by state-owned power utility Eskom that it could not guarantee power supply to their operations.

The world's No. 1 platinum producer, Anglo Platinum (Angloplat), also said it had shut down production at all its South African mines to reduce electricity consumption.

"This is a disaster in terms of production and economic growth," said Fidelis Madavo, analyst at the Public Investment Corporation fund. "The government has to find an emergency solution to this problem."

Spot gold hit a record high of $923.40 an ounce and platinum

hit an historic high at $1,697 an ounce after news of the mine closures broke.

The South African government blames the power cuts on the closure of power stations for maintenance, breakdowns at other plants and faster-than-expected economic growth.

Critics say the government has failed to invest in new power generation, arguing the country has too little power capacity to meet demand from its growing economy.

South Africa, the world's lowest-cost electricity producer, relies on coal for most of its electricity.

State-owned utility Eskom has said it plans to spend 300 billion rand on new power generation and on improving its infrastructure in the next five years.

"SURVIVAL LEVELS"

Gold Fields said it would lose 7,000 ounces of gold a day while production was halted.

It said Eskom had informed it electricity to key industrial customers, mainly big miners, would be reduced to "survival levels" or switched off totally for the next two to four weeks.

"This will have a serious effect on the South African operations and will negatively affect our gold production," Ian Cockerill, chief executive officer of Gold Fields, said.

Harmony said it would lose about 300 kg of gold output, or 60 million rand, a day. AngloGold said it could not estimate its daily losses as it calculated its output on a quarterly basis.

"We are only running power for emergency supplies, such as pumping water out, and have stopped producing at all mines," Steve Lenahan, a spokesman for AngloGold told Reuters.

It was unclear how long the power shortage would last.

"It seems to me this is not going to be a quick process (resolution). They issued us with a warning that we should only do emergency work, so we can't take a chance sending our people underground," Harmony CEO Graham Briggs told Reuters.

About 900 kg of gold (28,935 ounces) and 590 kg (18,969 ounces) of platinum output could be lost a day, an analyst said.

Angloplat, which accounts for 40 percent of world supplies of platinum, used for jewellery and cleaning car exhausts, is expected to lose 9,000 refined platinum ounces output a day.

"We are not mining at all of our operations. We have decided not to produce in order to reduce electricity consumption," spokesman Trevor Raymond told Reuters.

The world's second-biggest platinum miner, Impala Platinum (Implats), said it would lose 3,500 ounces of refined platinum a day after halting operations at its largest mine near Rustenburg, but continued mining at its smaller Marula mine.

Global diversified miner Anglo American said five of its nine coal mines in South Africa's north east had halted output, but could not estimate the loss in production.

Shares in AngloGold and Harmony fell as much as 7 percent, while Gold Fields lost 9 percent. Angloplat's stock fell 2 percent, while rival Implats' shed 3 percent.

S.African Power Crisis Halts Gold, Platinum Mining
Fri 25 Jan 2008, 12:01 GMT

JOHANNESBURG (Reuters) - South African gold producers and the world's biggest platinum miner suspended production at all their mines in the country on Friday due to a power crisis, helping send precious metal prices to new highs.

Shares in most of the affected firms dived as the government said the power cuts that have darkened homes and hurt businesses in Africa's biggest economy were "a national emergency".

AngloGold Ashanti, Gold Fields, and Harmony said they had stopped all gold mining after they were informed by state-owned power utility Eskom that it could not guarantee power supply to their operations.

The world's No. 1 platinum producer, Anglo Platinum (Angloplat), also said it had shut down production at all its South African mines to reduce electricity consumption.

"This is a disaster in terms of production and economic growth," said Fidelis Madavo, analyst at the Public Investment Corporation fund. "The government has to find an emergency solution to this problem."

Spot gold hit a record high of $923.40 an ounce and platinum

hit an historic high at $1,697 an ounce after news of the mine closures broke.

The South African government blames the power cuts on the closure of power stations for maintenance, breakdowns at other plants and faster-than-expected economic growth.

Critics say the government has failed to invest in new power generation, arguing the country has too little power capacity to meet demand from its growing economy.

South Africa, the world's lowest-cost electricity producer, relies on coal for most of its electricity.

State-owned utility Eskom has said it plans to spend 300 billion rand on new power generation and on improving its infrastructure in the next five years.

"SURVIVAL LEVELS"

Gold Fields said it would lose 7,000 ounces of gold a day while production was halted.

It said Eskom had informed it electricity to key industrial customers, mainly big miners, would be reduced to "survival levels" or switched off totally for the next two to four weeks.

"This will have a serious effect on the South African operations and will negatively affect our gold production," Ian Cockerill, chief executive officer of Gold Fields, said.

Harmony said it would lose about 300 kg of gold output, or 60 million rand, a day. AngloGold said it could not estimate its daily losses as it calculated its output on a quarterly basis.

"We are only running power for emergency supplies, such as pumping water out, and have stopped producing at all mines," Steve Lenahan, a spokesman for AngloGold told Reuters.

It was unclear how long the power shortage would last.

"It seems to me this is not going to be a quick process (resolution). They issued us with a warning that we should only do emergency work, so we can't take a chance sending our people underground," Harmony CEO Graham Briggs told Reuters.

About 900 kg of gold (28,935 ounces) and 590 kg (18,969 ounces) of platinum output could be lost a day, an analyst said.

Angloplat, which accounts for 40 percent of world supplies of platinum, used for jewellery and cleaning car exhausts, is expected to lose 9,000 refined platinum ounces output a day.

"We are not mining at all of our operations. We have decided not to produce in order to reduce electricity consumption," spokesman Trevor Raymond told Reuters.

The world's second-biggest platinum miner, Impala Platinum (Implats), said it would lose 3,500 ounces of refined platinum a day after halting operations at its largest mine near Rustenburg, but continued mining at its smaller Marula mine.

Global diversified miner Anglo American said five of its nine coal mines in South Africa's north east had halted output, but could not estimate the loss in production.

Shares in AngloGold and Harmony fell as much as 7 percent, while Gold Fields lost 9 percent. Angloplat's stock fell 2 percent, while rival Implats' shed 3 percent.

South Africa Shuts Down all Gold and Platinum Mines!
The power crisis in South Africa which has been leading to electricity outages across the country, has led to the country’s gold and platinum mining majors to shut down their operations until continuity of supplies can be guaranteed.

Author: Lawrence Williams
Posted: Friday , 25 Jan 2008

LONDON -

The power crisis across Southern Africa, and in South Africa itself in particular, has led to the temporary shutdown of all the latter country's major gold operations. Power failures at major mining operations, particularly given the depths of the operations, would be dangerous in that hoisting capacity to bring the miners out of the workings, which would be necessary because of possible ventilation breakdowns, would be severely limited.

South African state electricity provider Escom has reportedly told the mines it cannot guarantee the continuity of electricity supplies and, as a result Anglogold Ashanti, Gold Fields and Harmony have had to take the decision to shut down their operations until power supplies can be guaranteed.

While South Africa is still the world's largest gold producer, although it is being overtaken by China, any continued disruption of operations would have a significant impact on world gold supplies.

South African gold mine stocks fell on the news, and the disruption to supplies was also a factor in the gold price rising to new highs this morning where it reached just on $920 at the time of writing.

The power crisis will also have a similar impact on other sectors of the mining industry and platinum supplies will be particularly vulnerable with the country being by far the world's largest producer of platinum group metals. The world's two largest producers., Anglo Platinum and Impala, have also had to shut down their operations and smaller operators will be following suit. World platinum prices have also reached new records as a result.

The crisis is a major blow to the South African economy as well as to the country's miners.

At the moment there is no indication as to how long the closures will continue, but comments from South Africa suggest that the situation may get worse before it gets better. Watch this space!

South Africa shuts down all gold and platinum mines
The power crisis in South Africa which has been leading to electricity outages across the country, has led to the country’s gold and platinum mining majors to shut down their operations until continuity of supplies can be guaranteed.

Author: Lawrence Williams
Posted: Friday , 25 Jan 2008

LONDON -

The power crisis across Southern Africa, and in South Africa itself in particular, has led to the temporary shutdown of all the latter country's major gold operations. Power failures at major mining operations, particularly given the depths of the operations, would be dangerous in that hoisting capacity to bring the miners out of the workings, which would be necessary because of possible ventilation breakdowns, would be severely limited.

South African state electricity provider Escom has reportedly told the mines it cannot guarantee the continuity of electricity supplies and, as a result Anglogold Ashanti, Gold Fields and Harmony have had to take the decision to shut down their operations until power supplies can be guaranteed.

While South Africa is still the world's largest gold producer, although it is being overtaken by China, any continued disruption of operations would have a significant impact on world gold supplies.

South African gold mine stocks fell on the news, and the disruption to supplies was also a factor in the gold price rising to new highs this morning where it reached just on $920 at the time of writing.

The power crisis will also have a similar impact on other sectors of the mining industry and platinum supplies will be particularly vulnerable with the country being by far the world's largest producer of platinum group metals. The world's two largest producers., Anglo Platinum and Impala, have also had to shut down their operations and smaller operators will be following suit. World platinum prices have also reached new records as a result.

The crisis is a major blow to the South African economy as well as to the country's miners.

At the moment there is no indication as to how long the closures will continue, but comments from South Africa suggest that the situation may get worse before it gets better. Watch this space!

Fertilizer! POT IS SMOKING!

POT sold down to $105 yesterday, looks like it will open at $130+.

Where can you find companies with customers who have cash gushing from their overalls? The farm economy is the strongest it has EVER been. Seeing CNBC compare fertilizer stocks to .com's of the bubble blows my mind, total manure! If POT hits guidance it will have a P/E of 13 to 15 at year end 2008.

Kipp

Buying favorite Oil, Gold/Silver, Ag in the opening minutes, call me crazy! Max fear time!

CXPO.OB, POE.V, OIL.TO, PBG.TO, PNG.TO, TXCO, KCL.V, AGU, POT, MOS, CF, SST.V, EXN.V, NGG.V,GORO.OB, FR.TO

All good potential for long term growth.

Good Luck!

Kipp

Silverstone Discovers Significant Disseminated Silver-Gold Mineralization in the La Colorada Zone, Copala Project

http://biz.yahoo.com/iw/080123/0351841.html?printer=1

I wish I had more SST.V!

Kipp

Oil Imports to U.S.A.

This is from the Gartman Letter yesterday, really surprised me!

"...we note that the latest data
from the US government makes it very clear that Canada
was, is, and likely shall continue to be the US' the largest
supplier of "foreign" crude oil [Ed. Note: The US itself
remains the US' largest supplier of crude oil, which most
Americans would never be able to answer properly if
asked. However, the fact remains that the US supplies
more than 4 times as much crude to itself as does its
leading foreign supplier.]. According to the DOE, Canada
delivered an average of 1.9 million bpd to the US in
October of last year... the latest month for which the DOE
has proper data. Mexico moved 1.3 million bpd to the US,
followed hard upon by Nigeria, which sold he US 1.2
million bpd. Saudi Arabia was 4th, providing 1.1 million
bpd, with Venezuela finishing in 5th place. We find this
interesting only in light of the fact that the Administration,
and Congress, and the media and most importantly the
ethanol communities constantly tell the American public
that it must reduce its dependence "upon Middle Eastern
crude oil." Our response is that we did so long ago, and
have substituted dependence upon Canadian, and
Mexican, and Nigerian and Venezuelan crude oil
instead."

Oil Imports to U.S.A.

This is from the Gartman Letter yesterday, really surprised me!

"...we note that the latest data
from the US government makes it very clear that Canada
was, is, and likely shall continue to be the US' the largest
supplier of "foreign" crude oil [Ed. Note: The US itself
remains the US' largest supplier of crude oil, which most
Americans would never be able to answer properly if
asked. However, the fact remains that the US supplies
more than 4 times as much crude to itself as does its
leading foreign supplier.]. According to the DOE, Canada
delivered an average of 1.9 million bpd to the US in
October of last year... the latest month for which the DOE
has proper data. Mexico moved 1.3 million bpd to the US,
followed hard upon by Nigeria, which sold he US 1.2
million bpd. Saudi Arabia was 4th, providing 1.1 million
bpd, with Venezuela finishing in 5th place. We find this
interesting only in light of the fact that the Administration,
and Congress, and the media and most importantly the
ethanol communities constantly tell the American public
that it must reduce its dependence "upon Middle Eastern
crude oil." Our response is that we did so long ago, and
have substituted dependence upon Canadian, and
Mexican, and Nigerian and Venezuelan crude oil
instead."

Great Ag Website! I forgot about these guys until they sent me a subscription offer the other day!

http://greenmarkets.pf.com/

Check out the tabs.

Kipp

BASIC POINTS INVESTMENT RECOMMENDATIONS

INVESTMENT RECOMMENDATIONS
1. The fi nancial crisis is not centered in stock markets. Its primary locus is
in fi nancial derivatives, and in their impact on the stock prices of leading
banks. Until the downward drift of bank stocks and the upward drift of
derivative debt yields is reversed, the stock market will continue to slide.
Keep overall equity exposure to minimums, and emphasize quality.
2. Bond investors face two risks: infl ation and credit. Nominal Treasury
bond yields are far too low, and quality corporates are too rare—with 71%
of corporate debt junk-rated. Buy infl ation-hedged sovereign bonds—
preferably in major foreign currencies. Simplicity is Good: avoid complex
products that are subject to drastic rating writedowns.
3. Commodity stocks are at risk to the extent that the fi nancial frauds and
foolishness are able to abort the global economic recovery. A US recession
would be good news only for gold stocks. It would be bad news for base
metal and steel stocks, and negative news for oil stocks. Agricultural stocks
should not be hurt, except that major bear raids will likely spew blood
broadly across stock markets.
4. Any panic-driven selloffs in commodity stocks is unlikely to take them
off the top performers lists for more than a few weeks. They are not just
fair-weather friends. Not only are most of the majors very cheap on a
forward-earnings basis, but mining and oil companies which ordinarily
search for resources in remote regions will take advantage of selloffs to
acquire reserves in politically-safe regions at bargain cost. Coming out the
other side of this slowdown, these stocks will experience big increases in
their absolute and relative P/Es. Some day, a big SWF is going to decide
that bailing out banks isn’t as profi table as owning matchless reserves of
minerals.
5. Food price infl ation should strengthen through the year. It could be
offset by broad price declines across the US economy as it struggles with
recession, but it is becoming imbedded in the global economy, and will
be a challenge for many years. It will produce a full-blown crisis when a
major crop failure occurs.
6. The Canadian dollar trades right around parity. It might not climb sharply
higher if a US recession is confi rmed, because of the impact on the
industrial sector and tourism. It remains a fundamentally strong currency,
and the greenback remains a fundamentally weak currency. Canadian
borrowers should borrow in greenbacks.
7. Gold’s move has been dramatic, but retail investors in North America and
Europe have not yet shown signs of true gold fever. That means there is
still substantial upside. Soaring silver and platinum prices confi rm that this
gold move is no mere spastic twitch. The expression “As good as gold” in
reference to Treasurys and other US debt instruments should be restricted
to use as a warm-up joke at investment policy meetings.
8. Defense stocks have solidly outperformed the S&P for most of the Bush
presidency. Iraq and Afghanistan have run down a wide range of Pentagon
inventories and a new generation of fi ghter jets cannot be postponed
much longer. No matter who wins the Presidency, these companies should
continue to prosper.
9. Sovereign Wealth Funds have been buying US banks. Wall Street cites these
purchases as evidence of great value in bank stocks. For nations which
are overweight Treasurys in their holdings and underweight infl uence in
American politics, swapping Treasurys for bank equities and convertibles
makes sense. That does not necessarily mean that the stocks are great
value for investors who cannot get other—unspecifi ed—returns on their
investments.
10. Use panic days to strengthen your equity portfolio, buying the agricultural,
gold, and oil stocks you will want to own after the bear retreats to his
cave—and selling stocks that are too dependent on US consumers. Retain
your quality base metal stocks: they may well be taken out by other mining
companies, or a Sovereign Wealth Fund.
11. The US smallcap bear market may be overshooting because investors
haven’t analyzed the likely improved competitive positions of companies
whose principal competitors were bought by Private Equity or are Canadian
or European companies hurt by the weakening dollar.
12. Be like all wise cottage owners: Protect your possessions from Rats.

BASIC POINTS INVESTMENT RECOMMENDATIONS

INVESTMENT RECOMMENDATIONS
1. The fi nancial crisis is not centered in stock markets. Its primary locus is
in fi nancial derivatives, and in their impact on the stock prices of leading
banks. Until the downward drift of bank stocks and the upward drift of
derivative debt yields is reversed, the stock market will continue to slide.
Keep overall equity exposure to minimums, and emphasize quality.
2. Bond investors face two risks: infl ation and credit. Nominal Treasury
bond yields are far too low, and quality corporates are too rare—with 71%
of corporate debt junk-rated. Buy infl ation-hedged sovereign bonds—
preferably in major foreign currencies. Simplicity is Good: avoid complex
products that are subject to drastic rating writedowns.
3. Commodity stocks are at risk to the extent that the fi nancial frauds and
foolishness are able to abort the global economic recovery. A US recession
would be good news only for gold stocks. It would be bad news for base
metal and steel stocks, and negative news for oil stocks. Agricultural stocks
should not be hurt, except that major bear raids will likely spew blood
broadly across stock markets.
4. Any panic-driven selloffs in commodity stocks is unlikely to take them
off the top performers lists for more than a few weeks. They are not just
fair-weather friends. Not only are most of the majors very cheap on a
forward-earnings basis, but mining and oil companies which ordinarily
search for resources in remote regions will take advantage of selloffs to
acquire reserves in politically-safe regions at bargain cost. Coming out the
other side of this slowdown, these stocks will experience big increases in
their absolute and relative P/Es. Some day, a big SWF is going to decide
that bailing out banks isn’t as profi table as owning matchless reserves of
minerals.
5. Food price infl ation should strengthen through the year. It could be
offset by broad price declines across the US economy as it struggles with
recession, but it is becoming imbedded in the global economy, and will
be a challenge for many years. It will produce a full-blown crisis when a
major crop failure occurs.
6. The Canadian dollar trades right around parity. It might not climb sharply
higher if a US recession is confi rmed, because of the impact on the
industrial sector and tourism. It remains a fundamentally strong currency,
and the greenback remains a fundamentally weak currency. Canadian
borrowers should borrow in greenbacks.
7. Gold’s move has been dramatic, but retail investors in North America and
Europe have not yet shown signs of true gold fever. That means there is
still substantial upside. Soaring silver and platinum prices confi rm that this
gold move is no mere spastic twitch. The expression “As good as gold” in
reference to Treasurys and other US debt instruments should be restricted
to use as a warm-up joke at investment policy meetings.
8. Defense stocks have solidly outperformed the S&P for most of the Bush
presidency. Iraq and Afghanistan have run down a wide range of Pentagon
inventories and a new generation of fi ghter jets cannot be postponed
much longer. No matter who wins the Presidency, these companies should
continue to prosper.
9. Sovereign Wealth Funds have been buying US banks. Wall Street cites these
purchases as evidence of great value in bank stocks. For nations which
are overweight Treasurys in their holdings and underweight infl uence in
American politics, swapping Treasurys for bank equities and convertibles
makes sense. That does not necessarily mean that the stocks are great
value for investors who cannot get other—unspecifi ed—returns on their
investments.
10. Use panic days to strengthen your equity portfolio, buying the agricultural,
gold, and oil stocks you will want to own after the bear retreats to his
cave—and selling stocks that are too dependent on US consumers. Retain
your quality base metal stocks: they may well be taken out by other mining
companies, or a Sovereign Wealth Fund.
11. The US smallcap bear market may be overshooting because investors
haven’t analyzed the likely improved competitive positions of companies
whose principal competitors were bought by Private Equity or are Canadian
or European companies hurt by the weakening dollar.
12. Be like all wise cottage owners: Protect your possessions from Rats.

BASIC POINTS INVESTMENT RECOMMENDATIONS

INVESTMENT RECOMMENDATIONS
1. The fi nancial crisis is not centered in stock markets. Its primary locus is
in fi nancial derivatives, and in their impact on the stock prices of leading
banks. Until the downward drift of bank stocks and the upward drift of
derivative debt yields is reversed, the stock market will continue to slide.
Keep overall equity exposure to minimums, and emphasize quality.
2. Bond investors face two risks: infl ation and credit. Nominal Treasury
bond yields are far too low, and quality corporates are too rare—with 71%
of corporate debt junk-rated. Buy infl ation-hedged sovereign bonds—
preferably in major foreign currencies. Simplicity is Good: avoid complex
products that are subject to drastic rating writedowns.
3. Commodity stocks are at risk to the extent that the fi nancial frauds and
foolishness are able to abort the global economic recovery. A US recession
would be good news only for gold stocks. It would be bad news for base
metal and steel stocks, and negative news for oil stocks. Agricultural stocks
should not be hurt, except that major bear raids will likely spew blood
broadly across stock markets.
4. Any panic-driven selloffs in commodity stocks is unlikely to take them
off the top performers lists for more than a few weeks. They are not just
fair-weather friends. Not only are most of the majors very cheap on a
forward-earnings basis, but mining and oil companies which ordinarily
search for resources in remote regions will take advantage of selloffs to
acquire reserves in politically-safe regions at bargain cost. Coming out the
other side of this slowdown, these stocks will experience big increases in
their absolute and relative P/Es. Some day, a big SWF is going to decide
that bailing out banks isn’t as profi table as owning matchless reserves of
minerals.
5. Food price infl ation should strengthen through the year. It could be
offset by broad price declines across the US economy as it struggles with
recession, but it is becoming imbedded in the global economy, and will
be a challenge for many years. It will produce a full-blown crisis when a
major crop failure occurs.
6. The Canadian dollar trades right around parity. It might not climb sharply
higher if a US recession is confi rmed, because of the impact on the
industrial sector and tourism. It remains a fundamentally strong currency,
and the greenback remains a fundamentally weak currency. Canadian
borrowers should borrow in greenbacks.
7. Gold’s move has been dramatic, but retail investors in North America and
Europe have not yet shown signs of true gold fever. That means there is
still substantial upside. Soaring silver and platinum prices confi rm that this
gold move is no mere spastic twitch. The expression “As good as gold” in
reference to Treasurys and other US debt instruments should be restricted
to use as a warm-up joke at investment policy meetings.
8. Defense stocks have solidly outperformed the S&P for most of the Bush
presidency. Iraq and Afghanistan have run down a wide range of Pentagon
inventories and a new generation of fi ghter jets cannot be postponed
much longer. No matter who wins the Presidency, these companies should
continue to prosper.
9. Sovereign Wealth Funds have been buying US banks. Wall Street cites these
purchases as evidence of great value in bank stocks. For nations which
are overweight Treasurys in their holdings and underweight infl uence in
American politics, swapping Treasurys for bank equities and convertibles
makes sense. That does not necessarily mean that the stocks are great
value for investors who cannot get other—unspecifi ed—returns on their
investments.
10. Use panic days to strengthen your equity portfolio, buying the agricultural,
gold, and oil stocks you will want to own after the bear retreats to his
cave—and selling stocks that are too dependent on US consumers. Retain
your quality base metal stocks: they may well be taken out by other mining
companies, or a Sovereign Wealth Fund.
11. The US smallcap bear market may be overshooting because investors
haven’t analyzed the likely improved competitive positions of companies
whose principal competitors were bought by Private Equity or are Canadian
or European companies hurt by the weakening dollar.
12. Be like all wise cottage owners: Protect your possessions from Rats.

BASIC POINTS INVESTMENT RECOMMENDATIONS

INVESTMENT RECOMMENDATIONS
1. The fi nancial crisis is not centered in stock markets. Its primary locus is
in fi nancial derivatives, and in their impact on the stock prices of leading
banks. Until the downward drift of bank stocks and the upward drift of
derivative debt yields is reversed, the stock market will continue to slide.
Keep overall equity exposure to minimums, and emphasize quality.
2. Bond investors face two risks: infl ation and credit. Nominal Treasury
bond yields are far too low, and quality corporates are too rare—with 71%
of corporate debt junk-rated. Buy infl ation-hedged sovereign bonds—
preferably in major foreign currencies. Simplicity is Good: avoid complex
products that are subject to drastic rating writedowns.
3. Commodity stocks are at risk to the extent that the fi nancial frauds and
foolishness are able to abort the global economic recovery. A US recession
would be good news only for gold stocks. It would be bad news for base
metal and steel stocks, and negative news for oil stocks. Agricultural stocks
should not be hurt, except that major bear raids will likely spew blood
broadly across stock markets.
4. Any panic-driven selloffs in commodity stocks is unlikely to take them
off the top performers lists for more than a few weeks. They are not just
fair-weather friends. Not only are most of the majors very cheap on a
forward-earnings basis, but mining and oil companies which ordinarily
search for resources in remote regions will take advantage of selloffs to
acquire reserves in politically-safe regions at bargain cost. Coming out the
other side of this slowdown, these stocks will experience big increases in
their absolute and relative P/Es. Some day, a big SWF is going to decide
that bailing out banks isn’t as profi table as owning matchless reserves of
minerals.
5. Food price infl ation should strengthen through the year. It could be
offset by broad price declines across the US economy as it struggles with
recession, but it is becoming imbedded in the global economy, and will
be a challenge for many years. It will produce a full-blown crisis when a
major crop failure occurs.
6. The Canadian dollar trades right around parity. It might not climb sharply
higher if a US recession is confi rmed, because of the impact on the
industrial sector and tourism. It remains a fundamentally strong currency,
and the greenback remains a fundamentally weak currency. Canadian
borrowers should borrow in greenbacks.
7. Gold’s move has been dramatic, but retail investors in North America and
Europe have not yet shown signs of true gold fever. That means there is
still substantial upside. Soaring silver and platinum prices confi rm that this
gold move is no mere spastic twitch. The expression “As good as gold” in
reference to Treasurys and other US debt instruments should be restricted
to use as a warm-up joke at investment policy meetings.
8. Defense stocks have solidly outperformed the S&P for most of the Bush
presidency. Iraq and Afghanistan have run down a wide range of Pentagon
inventories and a new generation of fi ghter jets cannot be postponed
much longer. No matter who wins the Presidency, these companies should
continue to prosper.
9. Sovereign Wealth Funds have been buying US banks. Wall Street cites these
purchases as evidence of great value in bank stocks. For nations which
are overweight Treasurys in their holdings and underweight infl uence in
American politics, swapping Treasurys for bank equities and convertibles
makes sense. That does not necessarily mean that the stocks are great
value for investors who cannot get other—unspecifi ed—returns on their
investments.
10. Use panic days to strengthen your equity portfolio, buying the agricultural,
gold, and oil stocks you will want to own after the bear retreats to his
cave—and selling stocks that are too dependent on US consumers. Retain
your quality base metal stocks: they may well be taken out by other mining
companies, or a Sovereign Wealth Fund.
11. The US smallcap bear market may be overshooting because investors
haven’t analyzed the likely improved competitive positions of companies
whose principal competitors were bought by Private Equity or are Canadian
or European companies hurt by the weakening dollar.
12. Be like all wise cottage owners: Protect your possessions from Rats.

Gold/Silver, Energy, Agriculture

This is where I think we see the inflection point for commodity stocks vs. consumer discretionary, real estate, financials, banking, housing, entertainment, etc. I could be way wrong, but I think the investment community will ask this question:

"What can I buy that is worth something?"

Oil hanging around $89, Gold $862, Silver $15.60, Corn near $5/bshl, wheat $10, Soybeans $13, potash $400/ton, MAP $700ton, etc. etc. All very near if not at all time highs with more room to go adjusted for inflation. It seems to me that if markets look ahead, and discount the future, a huge crash in these prices would be under way IF we were going to have a "normal" recession.

I am sure the FED is going to slash interest rates and crank up the printing presses to "re-flate" the banks/economy. This should cause the dollar value to decline more, and inflation to go up.

Chart after chart shows global inventories of grain, oil, base metals, etc. at historic lows, not highs. Interest rates are low, unemployment is lower than past recessions. This is not a recession brought on by excess prodution/inventories leading to job loss and drying up of investment. This is a financial crisis recession brought on by insanity in the financial world, and over valuation of real estate/lose lending. We still have to eat, heat homes, and drive to work.

The Chinese have moved too many people to the cities and started too many capital projects to pull the plug today. The powers that be will do whatever it takes to avoid the population taking to the streets.

I am buying companies on this sell off that are dramatically increasing production, and benefiting from strong prices of their products. Also gold/silver will benefit as global money supply reaches insain levels.

We shall see!!!!! Fasten seatbelts for the rest of the week!!!!

Good Luck!

Kipp

Petrominerales, PMG.TO

(I added a bunch of links to Bobwins original post on PMG.TO. I really like this company and will buy shares on this pullback. Thanks Bob!)

http://www.petrominerales.com/

Chart: http://stockcharts.com/charts/gallery.html?PMG.TO

Recent IR Presentation:
http://www.petrominerales.com/webdocs/presentations/Petrominerales_Corporate_Presentation.pdf

I was worried about the country risk and investing in Columbia. I feel good about the situation after reading what the company says about it here: http://www.petrominerales.com/lat-changingcolombia.html


This is the 82.6% subsidiary of Petrobank (PBG.TO). They operate in Colombia and have over 1.5 million acres of land to explore. PMG.TO is coming off a record Q3 with 4,522bpd average production, revs of $29 million and EPS of C$.10 fully diluted. With a share price of $15, PMG.TO/PMGLF.pk might not look that cheap but there is extraordinary growth coming.

PMG.TO was producing around 2,000bpd when they hit a huge well in 2007. Corcel-1 tested at 10,000bpd. They can't produce at full rate because they need a pipeline. They are trucking around 4,000bpd from Corcel-1. Late summer 2007, PMG hit Corcel-2, which tested around 3100bpd and the company thinks can produce at 6,000bpd. PMG is currently drilling Corcel-3 and has a full schedule of 24 wells in Colombia. PMG is also permitting a 40,000bpd pipeline that should begin construction in second half 2008.

http://biz.yahoo.com/ccn/071106/200711060423890001.html?.v=1

This Q3 PR shows the potential of PMG. They generated 29million gross revs from 4522bpd. Current production with trucking is around 8100bpd. They could be close to 18,000bpd if the pipeline was in place. By late 2008, they could hit an exit rate of 30,000bpd or a potential gross rev of $240million per qtr!!! They could produce cashflow of $2/qtr or $8/yr forward casfhlow. The $15share price will look pretty cheap at that point.

PMG.TO has over 1.5 million acres left to explore. They have the license to use Petrobank's THAI extraction method, which could be ideal for the huge heavy oil resource in Colombia.
Overall PMG.TO has tremendous upside for increasing production. Colombia has one of the best financial royalty arrangements of any country so PMG will have high netbacks on any of their production.

I like it.

Kipp

Back from NE and WI Agri Expo Tradeshows

What a cold trip to Omaha and Madison this past week! Fertilizer prices are confirmed HOT HOT HOT! I talked with many salesmen from the majors. Potash is all being sold north of $400/ton. Dap and Map in the $675-$700+ range. Ammonia north of $650/ton. These prices are 100-300% higher than last year. Sulfur has gone from $112/ton to $252/ton in the past 30 days! Sulfuric acid is now firmly in the $300/ton on a spot basis, the contract market has frozen up and everyone is holding their breath to see where prices shake out longer term.

New observations:

In past fertilizer shortages, producers did not make as much money as brokers/re-sellers. Today, there are 90% fewer broker/re-sellers and the producers are making the high margins from higher prices.

There are not many ways to benefit from the sulfur/sulfuric acid spike. Most companies produce sulfur as a by-product and have typically viewed it as such. Chemtrade is the only good sulfur play I have found. The smelters and oil/gas companies will make a lot of money on their sulfur sales but it will only be a small contributor to their total income. Buying Conoco-Phillips as a sulfur play will not pay.

The shortage of sulfuric acid is getting so serious, it may shut some companies down. Be sure you are not invested in companies that do not have secure acid supplies!

I believe this pull back in fertilizer stocks should be bought. Maybe a dollar cost average approach will be best?? The one segment of the economy that will blow the doors off all others is the FARM economy! I think everyone here knows grain inventories are at all time lows, never before have farmers been able to contract high prices so far into the future, inflation is here, fertilizer mining is like all other mining....huge investment/permitting/environmental/etc..

I still like KCL.V best as a potash spec play. CF, MOS, YARA.OL, AGU, for N-P-K. CHEMTRADE LOGISTICS (CGIFF.PK) for Sulfur.

Good Luck Guys!

AEZ Drilling Update -

It is still my opinion that one of the majors will take AEZ out at a multiple of current valuation. Holding and molding. Kipp


American Oil and Gas Provides Drilling and Completion Updates

DENVER, January 14, 2008 – American Oil & Gas, Inc. (AMEX: AEZ) provides the following operational update:

Fetter Project

Hageman 16-34HR well: The Hageman well has recently reached total depth in the targeted Frontier formation and the drilling rig has been removed from the well site. Sidetracking operations in the Frontier, undertaken to maximize the intersection of naturally occurring fracture systems, resulted in three horizontal laterals totaling over 5,200 cumulative feet of lateral well bore, all of which was drilled in zone and will be opened up for production. Completion activities are underway and after completion, the well is expected to be immediately placed on production.

Wallis 6-23 well: The Wallis well has recently been drilled to a total depth of 13,000 feet. The drilling rig has been removed from the well site and completion operations have commenced. The Wallis well is the first vertical well to be drilled by American and partners in the Fetter project and is designed to test multiple prospective formations utilizing multi-stage frac technology. To date, the well has been completed and fracture stimulated in the Dakota formation, the deepest formation of interest in the well. As planned, the Dakota has been temporarily isolated below a cast iron bridge plug allowing completion operations to move up hole. Additional formations, including the Frontier, are prospective in the well. Upon completion and preliminary evaluation of these formations, the Dakota and our other zones of interest will be commingled, tested, and placed on production.

Sims 15-26H well: The 1,165 foot horizontal lateral, drilled into the targeted Frontier formation has recently been artificially fracture stimulated, cleaned up and returned to production at rates during the prior 25 producing days ranging from approximately 650 thousand cubic feet of natural gas equivalent per day to 7.2 million cubic feet of natural gas equivalent per day The average production over this time period was approximately 1.7 million cubic feet of natural gas and 82 barrels of oil per day. Rates have fluctuated as natural gas production from the well has been affected by the relatively high oil to gas ratios currently being experienced, which is the subject of ongoing engineering, reservoir and production optimization analysis. Because of the high BTU content and the favorable high liquid content of the natural gas that is separate from the oil production (approximately three gallons per mcf), we received a price at the wellhead for November natural gas sales of $6.75 per mcf.

The Wallis 6-23, Sims 15-26H and Hageman 16-34HR wells are being funded by Red Technology Alliance ("RTA") and project managed by Halliburton Energy Services, Inc. ("Halliburton"). American is being carried through the tanks in this phase of the drilling program for a 23.125% working interest in each of the three wells, and currently owns a 92.5% working interest in the approximate 52,000 net (58,000 gross) acre Fetter acreage position. Upon completion of this initial drilling program, RTA will earn a 25% working interest in the undrilled acreage, American will retain a 69.375% working interest and privately held North Finn LLC will retain the remaining 5.625% working interest.

West Douglas Project

State Deep 7-16 well: Completion operations are currently underway in the Mowry formation, the primary objective in the State Deep 7-16 well. Test results from deeper formations yielded minor quantities of oil and natural gas, and information obtained from these deeper formations will assist with future drilling plans in the project area. The State Deep 7-16 well location was chosen to maximize the potential of the Mowry, however completion and testing programs are also planned for several prospective formations above the Mowry in the coming weeks.

Pursuant to the agreement with RTA, 100% of the cost to drill and complete the State Deep 7-16 well is being funded by RTA. American owns a 45% carried working interest in this test well and will retain a 45% working interest in the approximate 47,000 net (55,000 gross) acre West Douglas project area. Halliburton is project manager.

Pat O'Brien, CEO of American commented, "We are currently active on a number of wells in our Douglas and West Douglas project areas and are very pleased with the progress that is being made. RTA is expending the time, money and manpower necessary to gain as much geological and reservoir information as possible from the numerous formations these large acreage positions hold. This time and money will greatly optimize drilling and completion procedures in future wells. Of particular significance in the current program is the production history we are now getting from the Sims well, and will soon receive from the Hageman and Wallis wells, that will allow us to compare the economic and reserve recovery potential from a single zone horizontal well to that of vertical well with multiple formation completions. We look forward to providing additional updates as more information becomes available."

Krejci Project

Krejci Family Trust 32-1H Well: Drilling operations at the Krejci project have recently recommenced with the Krejci Family Trust 32-1H well following an extensive evaluation and study of the various drilling and completion methods used on prior wells. This well is currently at a measured depth of approximately 7,700 feet. Casing has been run through the turn and drilling is currently underway in the horizontal lateral section in the targeted Mowry formation. American owns a 45% working interest in the Krejci Family Trust 32-1H well and in the approximate 127,000 net (132,000 gross) acre Krejci project.

Goliath Project

Solberg 32-2 Well: In November, 2007, the Solberg 32-2 well tested at a restricted flow rate of approximately 2.1 million cubic feet of natural gas and 408 barrels of condensate per day (over 750 barrels of oil equivalent per day) from one interval within the Red River formation. Additional potentially productive intervals within the Red River formation could be tested and if productive, produced at a later date. The Solberg 32-2 well is currently shut-in and waiting on completion of a nearby natural gas processing plant and a pipeline that will connect the well, both of which are expected to be completed and operational before the end of the first calendar quarter of 2008.

American and other joint interest owners in the Goliath project have recently completed a 10.5 square mile 3-D seismic program in the area around the Solberg 32-2 well and are currently processing and interpreting the data. Information obtained from this seismic program will assist in the selection of additional Red River offset locations to the Solberg 32-2 well, and may identify additional Red River targets in this trend.

The Solberg 32-2 well is located within American's approximate 89,000 gross acre Goliath project in Williams County, North Dakota. American owns a non-operated 11.9% working interest (a net revenue interest of approximately 9.5%) in the Solberg 32-2 well. American's working interest in future wells will vary, and could be as high as 50%.

American Oil & Gas, Inc. is an independent oil and natural gas company engaged in exploration, development and production of hydrocarbon reserves primarily in the Rocky Mountain region. Additional information about American Oil & Gas, Inc. can be found at the Company's website: www.americanog.com.

# # #

Natural gas stronger, Cornerstone Report:

http://www.cornerstoneenergy.com/marketnews/mi011108.pdf

Market Summary
The near month contract of February moved up $0.585 this past week, climbing each day since our last report with the low for the week of
$7.50 on Friday morning of last week and the high of $8.28 hit just before market close yesterday. Yesterday’s Energy Information
Administration’s inventory report showed that the 5-year stockpile surplus has been cut in half and now stands at 4.6% above average and
282 Bcf or 9.3% below last year’s stocks for the same week. According to the latest Commitments of Traders report dated December 31,
which shows the sentiment of market players; noncommercial traders increased their net short position to 67.9% short. Traders’ short
positions now outnumber long positions by 192,244 contracts to 90,903 contracts. The February contract on the NYMEX opened this
morning at $8.310 per MMBtu and is currently trading slightly higher at $8.321 per MMBtu.

* STRONG DEMAND KEEPS WORLD AMMONIA PRICES MOVING UP
* NOLA GRANULAR UREA BARGE PRICES DOWN SLIGHTLY
* HIGHER INPUT COSTS FIRM WORLD DAP PRICES
* POTASH PRICES STAY FIRM OVER THIN SUPPLIES








Fertilizer Price Board
(Dealer Reference: $/ston fob Warehouse or Pipeline)

Pricing Point Ammonia UAN Urea DAP Potash
($/Unit N) (Gran)
Minneapolis, Minn. 660 (N) + 10.00-50 -- 495 -- 615 (N) + 380 + *(N) (C)
Pt. Huron/Saginaw, Mich. 670 (N) + 10.70 -- 510 (N) + 570 (N) -- 335 (N) --
Lima/Toledo, Ohio 685+ 10.60 -- 500-05 + 565 (N) -- 350-60 --
Cincinnati, Ohio 680 (N) 10.50 -- 488 + 560 (N) -- 350 --
Huntingt./ Dunkirk, Ind. 665 -- 11.50 (N) + 510 -- 590 (N) -- 420 (N) --
Marseilles/Ottawa Ill. 665 (N) 12.00 + 485 + 585 -- 420-30 (N)--
Pekin, Ill. 665-70 + 11.50 + 470-75 + 575-90 + 430-35 +
Naples, Meredosia, Ill. 665 + 11.50 (N) + 470 (N) + 580 (N) + 375 --
Mt. Vernon, Ill., Henderson, Ky. 690 (N) + 11.00-15 + 510 -- 580 + 375 +
Dubuque, Clinton, Ia. 665 + 11.50 -- 465-80 + 590 + 420-30 (N) --
Burlington, Ia. 650 (N ) -- 11.65 + 480 + 610 + 425 +
Sioux City, Ia. 625 (N) 12.00 (N) -- 490 -- 585 (N) + NQ
Omaha, Neb. 625 + 12.00 (N) -- 490 -- 585 -- 400 +
St. Joseph , Mo. NQ 11.25 + 470 -- 570 + 400-410 +
St. Louis, Mo. 660 + 11.25 + 470 + 570 + 395-400 +
Caruthersville, Mo., Blythvlle, Ark. 590 + (F) 10.95 + 460 + 600-20 + 405-10 +
Tulsa, Okl. NQ 10.35-45 -- 450 (--) 590 (N) + 380*** +
Woodward /Enid, Okl. 530*** -- 10.35-45 -- 440 (N) -- NQ 350 (N)***(L) +
Memphis, Tenn. 570-75 + 10.95 + 450 -- 600-20 + 425 +
Vicksburg/Grenvle., Miss. 400 (AN) (N) + 11.25 + 455-65 + 615 + 430 --
Houston, Victoria, Tx., E. Tx. 575 (N)*** -- 10.30 +*** 465 -- 545-560 + NQ
Sterlington, Donaldsonville, La. 580 (N) *** + NQ 455*** -- (N) NQ NQ
New Orleans, La., Gulf Coast 414 + 10.95 + 425-35 (G) (--) 600-05* -- NQ
415 (P) (N) (--)
E. Coast, Ga. 425 (AN)(D) + 11.25 -- NQ NQ 395 --
Central Florida, U.S. Gulf 460-488 of which Tampa 460 (x) + NQ 570 (N)** NQ

Price Direction Indicators: + Higher; (--) Lower; -- No Change * Prompt Barge ** Rail Carloads *** Truckloads (C) FOB Canada (D) Delivered (F) fob Blytheville (H) low end-FOB, high end-Truck del. (AN) Ammonium Nitrate, fob (G) Granular (N) Nominal (L) FOB Carlsbad (P) Prilled (x) Tampa/ U.S. Gulf /mton (y) low end, ex barge-high end, ex warehouse (z) Low end -Rail del.- High end - ex Warehouse NQ No Quote
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
AMMONIA – New Sales Continue Seasonally Slow; World Market Prices Move Higher
New sales of ammonia were seasonally slow over most of the Midwest this week. A few loads of ammonia moved to dealer storage in cen. Ill. at $665. Wholesalers in E. Mo., S.W. Ill. said supplies of ammonia were still tight. Demand was strong for ammonia moving to corn, cotton, milo preplant in cen., coastal bend, S.E. Tx.
Known/possible ammonia shipments ex Yuzhnyy for Jan. now stand at 325-365,000t; of that total there are two 35-40,000t and four 20-25,000t cargoes headed for U.S. gulf/Tampa. Prices continue to firm with news of sales out of the Gorlovka plant in Ukraine at just over $420 fob. Two lots of ammonia sold recently at around/just over $420 fob, the first a 25,000t lot likely destined for the U.S. That price is up $20 from previous week’s indication. U.S. gulf landed prices have increased further for 2nd half Jan. with new business at $488 cfr. PCS has now finalized the price of a half cargo of ammonia for 2nd half Jan. delivery to a major consumer in the Mississippi river at $488 cfr. There have finally been new indications of spot M.E. prices. Qafco/Qatar has sold 15,000t to Mitsui at $450 fob for 2nd half Feb. Today’s tender by FACT, India, demonstrates the much higher prices now being sought by suppliers, with bids ranging from $440 cfr up to $500 cfr, significantly higher than the levels in the $350’s cfr which still prevail for formula-based contract sales.

Price Outlook: Black Sea fob prices have firmed further this week, with new business at around $420. Based on typical freight rates, a level of $420 fob out of Yuzhnyy would imply a landed cost of at least $490 in Tampa. As noted, U.S. gulf landed prices have currently reached $488 cfr. The crisis in phos acid shipments from N. Africa to India (see DAP, below) will have significant repercussions on ammonia demand into India. If the crisis is resolved quickly, Indian demand levels for ammonia could stay normal and support current ammonia prices. Should the crisis draw out, however, a good deal of M.E. ammonia could become available to the market, creating downward price pressure until the ammonia finds its way to a new home. We look for world ammonia prices to run firm with undertone of strength, absent a collapse in Indian demand.

Domestic demand for ammonia remains seasonally slow but as with other forms of fertilizer high crop prices are supporting farmer ability to pay much higher input costs. We expect domestic ammonia prices to stay strong for the short term.
Dry N – NOLA Granular Prices Soften; World Prices Rebound Then Go Flat

Wholesalers in N., cen. Ohio are buying in urea sold to farmers under prepay arrangements. Urea is selling to wholesalers buying in prepay tons in W. Ill., E. Ia. Urea moved in moderate volume to dealer storage in N. La., cen. Miss.; wholesalers expect good movement for wheat topdress to start next week. NOLA granular urea barge prices moved lower this week dropping into high $420’s-low 430’s.
ConAgra has bought Chinese prills this week at $355 fob, granular at $370. ConAgra has two granular cargoes booked for Feb. and Mar. ship to W. coast U.S. Igsas, Turkey, is said bought 6-8,000t netting low-mid $390’s fob Yuzhnyy. Toros apparently faced prices of $440 cfr for fresh urea cargo but Transammonia is now said to be offering at closer to $435. Some think there may be sufficient urea purchased for now, others that another 50-75,000t could be secured for Jan. ship. Koch has sold a granular cargo ex Venezuela to Incofe, Mexico, for shipment to the E. coast with prompt loading. The price has been reported variously from $420 to $440 cfr. One of the Indian government import agencies, most likely STC, is expected to come to market checking again the possibilities of importing urea under long term contracts. IPL recently published figures to prove that it found no value to this as they succeeded in buying cheaper than what would have been contract prices agreed on formula from either Yuzhnyy or the M.E. according to published prices in Dec. A total of 887,469t urea arrived in India in Dec. including shipments from Omifco. This brings the total figure for the year to 6,664,068t. Namhae, S. Korea has purchased 100,000t Chinese granular urea for delivery during the 3Q following its tender on Jan. 8. The award is made to five companies at prices ranging from $410-440 cfr with higher prices for later shipments. Dongbu is in the market for 20,000t granular urea for Feb. del. but negotiations are still underway. Chinese granular urea is reported sold to Philippine buyers in the low $440’s cfr. Chinese prilled urea is offered at around $400 cfr. Urea prices have moved up dramatically in Yuzhnyy; following sales late last week into the $380’s, $395 traded and then IBE was reported sold cargo at $400. Late week tons however were again reported available at $395 fob, although some producers are still indicating prices at $400 and above. M.E. prices are suffering from the continued presence of Chinese exports which are continuing to undercut M.E. price aspirations in S.E. Asia. Should India come back to market, prices closer to $380 would be achievable rather than the $410 last quoted and possibly lower. Therefore, even though Yuzhnyy prices have improved, it seems M.E. prilled prices are set to trade at a discount. U.S. prices continue to trade at a premium despite the current softness. Koch loaded a part cargo in Dec. that was sold at $415, the highest price paid so far on a spot basis.
Price Outlook : Traders looking to cover urea shorts in Turkey and Nigeria triggered a $30 price hike in Yuzhnyy ending at $400. Since then, however, price ideas appear to have softened a little with $395 said to be doable once again. There is still concern these two countries cannot support the Yuzhnyy line up alone and similarly, the Baltic cannot rely on Europe alone. Some trades are now being reported from the Baltic to S. America but equally sales are still being lost to China on the W. coast and Venezuela has even provided an export cargo for Mexico, taking away another much needed E. coast sale. Baltic prices have rebounded from the $370-375 low reported last week with tons trading at $384-385, but price aspirations of $390 and above seem to be unworkable today. We expect world urea prices to run flat with undertone of softness in the short term. Domestic urea prices at NOLA fell slightly from their peaks as several imported cargoes are arriving into seasonally slow demand. Also some traders are willing to ask lower to get prices of contract cargoes lower as well. With world prices looking to move flat, domestic prices may stop rising so fast in the short term. Wheat topdress demand should be strong when it does get started, however, and while some price softness could creep in we do not expect a substantial drop in urea prices in the short or medium term.
UAN – Prices Firm Up Over Slow New Sales;
A few loads of UAN went to dealer storage in cen. Ill. Demand is heavy for UAN going to cotton, corn, milo preplant in cen., coastal bend, S.E. Tx.
Ameropa has purchased 17,000t UAN today from Egypt that has been fixed to load late Jan. for W. coast U.S.
Price Outlook : Prices for competing forms of N are still very strong and some wholesalers indicate UAN supplies are still thin. We expect domestic UAN prices to run steady to higher in the short term.


DAP – NOLA Barge Prices Leap to Over $600; World Export Prices Increase Sharply
Wholesalers in N., cen. Ohio are buying in DAP sold for prepay. Light volume DAP went into dealer storage in cen. Ill. Price for DAP barges at NOLA leapt to over $600 midweek.
PhosChem sold 6,000t DAP for Feb. ship into Cen. America and a further 6,000t to Mexico, both at $675 fob Tampa. An additional 6,000t DAP has been sold into Mexico at $685 fob Tampa also for Feb. loading. PhosChem has since increased its offer price to $700 fob. A trader has sold 5-8,000t U.S. DAP for Feb. ship into Cen. America. Traders are faced with paying $700 fob Tunisia for DAP shipments to French Atlantic ports, $720 fob to the Med. OCP, Morocco, has yet to confirm its price. So far traders are rejecting these prices; freight is reported at up to $30. DAP availability is tight in Germany amid continued surges in international prices. Business has been heard done at $680 fot and fresh offers are around $700. GCT, Tunisia, has put another massive increase on the table for Jan. DAP contracts into Italy, opening negotiations at $720 fob. Italian buyers have refused this opening price and negotiations are underway. GCT started the week saying its opening price was $700 and so maybe there is some room for maneuver. Even at $700 plus freight of $25 or higher however, buyers are still faced with a huge increase which they might not choose to take, lacking confidence in their ability to pass this price on to the final user. This week the Chinese government pledged to try and cap price increases for critical inputs such as fertilizers, stating that a rise in price will only be permitted to cover cost increases, and this once the issue has been reviewed by local regulators. However, if the domestic price is artificially capped this may only serve to increase the attractiveness of exports. Reports indicate that OCP/Morocco has declared force majeure on Feb./Mar. shipments of phos acid to India predominantly due to losses being incurred due to much higher sulfur costs. OCP and GCT/Tunisia had already told buyers that they will supply less tonnage during Jan. This could force India to enter the DAP import market earlier than usual to source import tons to cover the shortfall in domestic production. Pakistani importers have increased the DAP price this week to around $650 cfr so there is still some way to go before prices fall closer in line with where current workable cfr prices are. EuroChem, FSU, sold DAP for 1st half Jan. load at $580-600 fob and at $600 fob Baltic for the 2nd half. Chinese phosphate producers have moved up their fob prices for all products and DAP is now being priced at up to $720 fob.
Price Outlook : Although global demand remains firm and supply relatively tight, this latest jump in prices can be largely attributed to increased prices for raw materials such as phosphate rock, sulfur and ammonia. Indeed OCP and GCT have or soon will, declare force majeure on Feb./Mar. shipments of phos acid to India. Both had earlier instructed buyers they would supply less tonnage during Jan. When this happened previously in 1989, shipments stopped and India was forced into the DAP market to cover in lost domestic production. For the short term it appears world DAP market prices could continue to rise. Domestic DAP prices moved up sharply (again), both at NOLA and at interior terminals. High crop prices continue to support farmers ability to afford the higher fertilizer costs and we look for domestic DAP prices to keep moving up.
POTASH – Prices Rise Over Continued Seasonally Slow Sales

Light volume potash was sold to wholesalers in N., cen. Ohio covering prepay tons. A few loads of potash moved to dealer storage in cen. Ill. Supplies are still thin in W. Ill., E. Ia. Light volume potash went out for corn, cotton, milo preplant in N. La., cen. Miss.

Price Outlook: World demand for potash continues strong and export suppliers are all well placed. Several wholesalers also said supplies are still thin. Domestic potash prices seem likely to keep rising in the short term.

COMMODITIES

Corn prices firmed up slightly, gaining 10 ¢ to $4.75. Soybean prices eased, dropping 7¢ to $12.44. Slower than expected export demand sent wheat prices tumbling, going down 60¢ to $8.85. A late week sell-off sent cotton prices sharply lower, losing 1.79¢ to 66.96¢/lb.

Ken Johnson Midwest Fertilizer Insight Phone (334) 863-7761 Email: mwfert@teleclipse.net















DAP: Cost includes only cost of raw materials processing and co-generation credit. Ammonia: Gas cost in ammonia based on capacity weighted average efficiency for nine Louisiana ammonia plants x midweek close nearest natural gas future NYM exchange.
















Selected World Market Prices ($/mton fob)
Ammonia Ammonia DAP DAP Urea Prilled Urea (Gran) Urea Gran) UAN (32%)
Date Yuzhnyy Caribbean Baltic Tampa Yuzhnyy Middle East
(For U.S.) Caribbean Yuzhnyy
1/14/08 400-420 420-440 700 (N) 675-685 380-400 376-425 375-427 330-335
1/7/08 380-400 410-420 540-550 575-610 370-379 382-432 380-427 339-340
12/24/07 360-400 410-420 540-550 575-610 380-385 382-432 385-427 339-340
* Revised ** Old Business (N) Nominal
Fertilizer Stock Prices
Company Thu 1/10 Prv Wk Change Indic Div Yield % P.E. High 52 week Low
Agrium 68.34 74.24 -5.90 .11 0.20 44 76.14 30.30
CF Holdings 110.68 115.84 -5.16 .08 0.10 25 119.44 26.95
Con Agra 23.92 23.26 +.66 .76 3.30 14 27.49 22.81
Mosaic 93.53 97.71 -4.18 NA NA 67 99.85 19.49
Potash Corp. 135.05 146.88 -11.83 .40 .30 47 151.90 45.31
Terra Industries 46.44 50.99 -4.55 NA NA 33 52.25 11.68
Terra Nitrogen 136.62 156.01 -19.39 8.40 6.20 16 159.46 31.83
Yara 51.94 46.56 + 5.38 NA NA NA 53.90 20.30

Correct LT-Matt City, then each type of fertilizer priced in dollars. The date on the newsletter is this coming Monday, January 14th.

MSGI - Trade Deficit

We have let 90% of our manufacturing business go overseas. We won't benefit from a weak dollar......period.

Current Fertilizer Prices

This is a table in a newsletter I got from a friend. Hard to read but you can if you try. Kipp



Pricing Point Ammonia UAN Urea DAP Potash
($/Unit N) (Gran)
Minneapolis, Minn. 660 (N) + 10.00-50 -- 495 -- 615 (N) + 380 + *(N) (C)
Pt. Huron/Saginaw, Mich. 670 (N) + 10.70 -- 510 (N) + 570 (N) -- 335 (N) --
Lima/Toledo, Ohio 685+ 10.60 -- 500-05 + 565 (N) -- 350-60 --
Cincinnati, Ohio 680 (N) 10.50 -- 488 + 560 (N) -- 350 --
Huntingt./ Dunkirk, Ind. 665 -- 11.50 (N) + 510 -- 590 (N) -- 420 (N) --
Marseilles/Ottawa Ill. 665 (N) 12.00 + 485 + 585 -- 420-30 (N)--
Pekin, Ill. 665-70 + 11.50 + 470-75 + 575-90 + 430-35 +
Naples, Meredosia, Ill. 665 + 11.50 (N) + 470 (N) + 580 (N) + 375 --
Mt. Vernon, Ill., Henderson, Ky. 690 (N) + 11.00-15 + 510 -- 580 + 375 +
Dubuque, Clinton, Ia. 665 + 11.50 -- 465-80 + 590 + 420-30 (N) --
Burlington, Ia. 650 (N ) -- 11.65 + 480 + 610 + 425 +
Sioux City, Ia. 625 (N) 12.00 (N) -- 490 -- 585 (N) + NQ
Omaha, Neb. 625 + 12.00 (N) -- 490 -- 585 -- 400 +
St. Joseph , Mo. NQ 11.25 + 470 -- 570 + 400-410 +
St. Louis, Mo. 660 + 11.25 + 470 + 570 + 395-400 +
Caruthersville, Mo., Blythvlle, Ark. 590 + (F) 10.95 + 460 + 600-20 + 405-10 +
Tulsa, Okl. NQ 10.35-45 -- 450 (--) 590 (N) + 380*** +
Woodward /Enid, Okl. 530*** -- 10.35-45 -- 440 (N) -- NQ 350 (N)***(L) +
Memphis, Tenn. 570-75 + 10.95 + 450 -- 600-20 + 425 +
Vicksburg/Grenvle., Miss. 400 (AN) (N) + 11.25 + 455-65 + 615 + 430 --
Houston, Victoria, Tx., E. Tx. 575 (N)*** -- 10.30 +*** 465 -- 545-560 + NQ
Sterlington, Donaldsonville, La. 580 (N) *** + NQ 455*** -- (N) NQ NQ
New Orleans, La., Gulf Coast 414 + 10.95 + 425-35 (G) (--) 600-05* -- NQ

What I do in the fertilizer business.

Some P.M.'s have been sent to me asking what I do in the fertilizer business.

Right now I am over my head with a shortage of all zinc, manganese and boron micronutrient products that we offer. My products are packaged and shipped on pallets that are distributed to fertilizer dealers. Micronutrient fertilizer is a small addition to the fertilizer blend, and only a few pounds per acre are required. Think of a vitamin pill versus a steak dinner. Most of my contacts are in the chemical distribution side of the business due to the need to deliver pallets on a route truck along with chemicals. We do sell direct bulk truckloads to some of the mega dealers like CVA. I had to put my customers on allocation for the forseeable as demand is way more than we can produce.

Headed to see my UAP contacts in Greeley, CO this afternoon to see what is changing after the Agrium buyout.

I wish I would have had more conviction about my own industry, but in the words of Donald Coxe, "those of us who know it the best, like it the least, because we have been disapointed the most!!!" So true!!!

Kipp