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lol ya and I also saw them in Montreal
BMC 1 year...
That looks a lot like a 50% increase to me
grow 25% by 2016. The 21.3 million tons consumed in the country last year are forecast to increase to 30.6 million tons
Only one nickel play I follow and I dont currently own any shares
http://investorshub.advfn.com/boards/board.asp?board_id=5180
I like agriculture this year wayover base metals
http://investorshub.advfn.com/boards/board.asp?board_id=9037
Time to suit up I guess...
I hope Arc took some of his pay in land
Thanks nice site http://www.jetnightclub.ca/index.cfm
Good stuff, where at?
Ya no kidding, also all that POT money would be looking for a new home :)
Potash king shows no mercy
Sean Silcoff, Financial Post Published: Friday, January 25, 2008
Bill Doyle is the most powerful chief executive in Canada, maybe the world. Don't laugh. The CEO of Potash Corp. sells something everyone needs -- fertilizer -- and he and his peers can charge what they want.
Even the mighty Chinese government has little choice but to accept the price of the two global potash-selling cartels: Beijing stared them down once, and blinked (asking for a US$20-a-tonne price cut, but accepting a US$25 hike in 2006-07).
This time, the price will likely go up by more than US$100.
The Chinese are playing tough in negotiations, but the potash makers have them over a barrel.
And Mr. Doyle -- his company is the world's largest fertilizer maker -- has the temerity to brag about it. If the Chinese don't like his price, he'll sell to someone else.
"We'll do better without them," he said yesterday, leaving Beijing with the "real political risk" of facing food shortages.
Mr. Doyle is playing a dangerous game, but one he can't lose.
It's hard to argue when agriculture commodity prices remain high.
Tens of millions of people are leaving poverty behind in China, India, Brazil and Eastern Europe each year, buying cars, homes and better food. Specifically, they are eating more meat, which requires more grains to feed the animals, which is why prices for corn and other basics have soared. And don't forget ethanol.
To get more out of their fields, farmers buy fertilizer -- demand is growing by 4% per year. Inventories are at their lowest in 17 years, and only Potash has the ability to raise production between now and 2012, by restarting idle mines, further cutting its industry-low costs.
Demand and production are rising, costs are falling and prices are soaring. One ton of potash in North America cost US$232 way back on Oct. 30. By March 1, it will be US$414. Prices in Brazil and Southeast Asia are even higher.
In the 1990s Potash had a long, dry run and people tuned out Mr. Doyle's shtick: He would hold out an apple, tell people to imagine it was the globe, then cut it up until he was left with a piece he said represented the 3% that was arable land. We're trying to feed the world, he'd say. But food prices stayed low. Still, Mr. Doyle did what great CEOs do: He readied an industry leader in an ignored business for its time in the sun.
That happened four years ago. Since then, each day has been brighter than the last. Yesterday, Potash said fourthquarter profit doubled, totaling US$1.1-billion in 2007; it could double this year.
But despite a 600% increase in the past four years, Potash still doesn't get the respect that it deserves. One analyst asked why it wasn't worth as much as its smaller U.S. rival, Minnesota-based Mosaic Co. "Attention-deficit disorder is alive and well on Bay Street and Wall Street," Mr. Doyle retorted.
But you can rest assured they're paying attention elsewhere. Potash will be the next Canadian jewel to be snapped up by a foreign buyer. Like Alcan, and Canada's nickel and steel giants, it trades at a decent price, but nothing like the premium foreign buyers would pay. High commodity prices and profits made those deals seem like bargains in retrospect. Potash investors should take note. "We know BHP Billiton has taken a look at us, we know Rio has looked at us" and sovereign wealth funds "are also a possibility," Mr. Doyle told me. It makes sense. If metals are strategically important to developing nations, agriculture will be, too.
"I don't think [the stock price] is nearly representative of our value," Mr. Doyle said, a standard line for CEOs but probably true in his case. "It won't be cheap if someone does take a run at us."
LOL I think he is mistaken
PotashOne is not an airplane its a rocket ship
Looks like it would be a good day for news, we'll see.
Time to give lessons on bottom picking Ed
lol and 2 years to go on that prediction!
Cash, Mega Uranium drill 0.042% U3O8 over 140 m at Igor
2008-01-23 06:41 MT - News Release
Also News Release (C-MGA) Mega Uranium Ltd
Mr. Basil Botha of Cash Minerals reports
CASH MINERALS INTERSECTS 140 METRES OF 0.042% U3O8 AND 0.76% COPPER AT SURFACE IN IGOR URANIUM PROPERTY
Cash Minerals Ltd. and joint venture partner Mega Uranium Ltd. have released additional drill results from the 2007 exploration program at the Igor iron-oxide copper-gold-uranium (IOCG-U) property, located in the Wernecke uranium district, Yukon. The 2007 drill program produced the most significant intersections on the Igor property to date, including the following highlights:
* Hole IG07-22 -- 140 metres of 0.042 per cent U3O8, 0.76 per cent Cu and 0.05 gram per tonne gold (Au), including seven metres of 0.417 per cent U3O8, 7.37 per cent Cu and 0.33 g/t Au;
* Hole IG07-06 -- 64.7 metres of 0.090 per cent U3O8, 1.18 per cent Cu and 2.25 g/t silver (Ag)(i);
* Hole IG07-12 -- 50 metres of 0.026 per cent U3O8 and 0.54 per cent Cu, including 6.9 metres of 0.152 per cent U3O8, 2.31 per cent Cu, 0.05 g/t Au.
(i) Intersection includes previously released results in Stockwatch Sept. 19, 2007, and Oct. 24, 2007.
Positive 2007 drilling results have confirmed the following:
* Mineralization at surface;
* Mineralization open to the north and at depth;
* Potential for an economic resource (resource estimate expected in second quarter 2008);
* Olympic-Dam style IOCG-U mineralization.
SIGNIFICANT IGOR RESULTS FOR 2007 SEASON TO DATE
(excluding results already released)
Hole ID From (m) To (m) Metres Cu (%) Ag (ppm) U3O8 (%) Au (g/t)
IG-2007-22 10.00 150.00 140.00 0.76 - 0.042 0.05
including 10.00 17.00 7.00 7.37 6.65 0.417 0.33
139.00 150.00 11.00 1.79 2.17 0.234 0.09
and 156.5 163.5 7.00 0.17 - - -
IG-2007-06(1) 96.30 161.00 64.70 1.18 2.25 0.090 -
and 62.80 66.80 4.00 0.22 - - -
IG-2007-12 5.00 55.00 50.00 0.54 - 0.026 -
including 45.20 52.10 6.90 2.31 4.83 0.152 0.05
and 120.40 133.00 12.60 0.30 - - -
IG-2007-21 164.50 234.50 70.00 0.55 - 0.007 -
including 196.00 234.50 38.50 0.93 - 0.013 0.06
200.00 207.50 7.50 2.45 1.33 0.037 0.15
IG-2007-09 7.00 19.50 12.50 0.74 1.44 - 0.11
including 7.00 14.50 7.50 1.18 2.03 - 0.16
and 76.00 81.00 5.00 0.39 - 0.009 -
and 114.00 118.00 4.00 0.21 - - -
IG-2007-15 6.50 29.00 22.50 0.85 - 0.016 -
including 6.50 8.50 2.00 7.05 4.53 0.148 0.23
and 46.50 52.00 5.50 0.56 1.39 0.011 -
IG-2007-05 6.00 24.50 18.50 0.90 5.74 0.011 0.15
including 6.00 9.50 3.50 4.01 4.75 0.050 0.50
and 34.00 40.00 6.00 0.20 - - -
and 93.00 97.00 4.00 0.32 - - -
and 114.10 117.50 3.40 0.52 1.04 - -
IG-2007-20(a) 22.00 76.00 54.00 0.14 1.96 0.020 -
including(b) 27.50 33.50 6.00 0.13 3.01 0.088 0.05
including(c) 46.00 56.50 10.50 0.05 1.15 0.023 -
including(d) 61.50 74.00 12.50 0.41 3.32 0.015 0.06
IG-2007-17(e) 29.50 34.00 4.50 0.14 2.95 0.076 0.06
and 53.00 58.00 5.00 0.03 1.68 0.053 -
IG-2007-04 72.50 77.00 4.50 0.40 1.12 - -
and 187.00 208.00 21.00 0.18 - - -
including 188.50 191.50 3.00 0.50 - - -
and 201.50 208.00 6.50 0.22 - - -
and 274.00 283.50 9.50 0.17 1.52 - 0.05
IG-2007-07 201.00 205.00 4.00 0.01 - 0.012 -
and 226.00 237.00 11.00 0.35 - - -
IG-2007-10 192.20 199.70 7.50 0.17 - 0.027 0.31
including 192.20 194.20 2.00 0.61 2.71 0.050 0.33
IG-2007-11 80.90 84.90 4.00 0.46 - - 0.05
and 117.60 125.00 7.40 0.85 2.18 0.006 -
and 130.00 133.00 3.00 3.00 2.57 - 0.07
and 236.90 253.00 16.10 0.12 - - -
IG-2007-16 124.50 140.00 15.50 0.21 - - -
and 182.50 203.00 20.50 0.18 - - -
Things look shakey in ny
I guess that rules out you buying a "Tackler Asset Management" ETF then.
You wouldnt know what to do with the returns anyway :)
or go the ETF route...
Higher potash price should benefit PotashCorp.
Posted: January 22, 2008, 12:04 PM by David Pett, Market Call
Another day and another analyst claiming the market meltdown offers a great buying opportunity for investors.
This time, RBC Capital analyst Fai Lee makes the case for Potash Corp. of Saskatchewan, whose shares have fallen almost 25% off its high of US$152.44 on Jan. 15.
"We believe PotashCorp's shares are significantly undervalued given our outlook for higher potash prices and tight fertilizer market conditions," the analyst said in a note to clients.
He pointed to the recent increase in potash prices in South East Asia from US$425 per tonne to US$525 per tonne as one potential catalyst and estimated that PotashCorp's net realized potash price could increase from US$380 to US$385 per tonne by Jan. 1, 2009.
Being conservative, he left his assumed net realized potash price of US$300 per tonne in 2008 and US$350 per tonne in 2009 unchanged, but noted a US$10 per tonne change to the assumption would impact his 2009 EPS estimate by US20¢.
Mr. Lee also said that potash inventory levels at customer and distributor warehouses appear to be at historical low levels setting up a favourable supply/demand scenario for the company going forward.
He maintained his US$195 price target on the shares and left his "outperform" rating unchanged.
Railroad Operator CSX's 4Q Profit Rises, By RON WORD
JACKSONVILLE, Fla. (AP) — Railroad operator CSX Corp. said Tuesday its profit rose more than 5 percent in the fourth quarter, as expanding business and productivity increases offset sharply higher fuel costs.
CSX said it reported net earnings of $365 million, or 86 cents per share, for the three months ended Dec. 28 compared to a year-earlier profit of $347 million, or 75 cents per share. The most recent quarter included a 1-cent-a-share gain on insurance. Revenue rose to $2.58 billion from $2.4 billion a year ago.
Analysts polled by Thomson Financial on average expected earnings per share of 64 cents.
The Jacksonville-based company's surface transportation businesses reported a 26 percent increase in operating income to a record $2.2 billion, adjusting for insurance gains and other items. Revenues for the unit exceeded $10 billion for the first time in the company's history.
Despite softness in the housing and automotive markets, CSX reported merchandise revenue increases of 7 percent for the quarter. Strength in agriculture, phosphate and chemical markets was attributed to the increase of corn production for ethanol, the company said.
The company said it was also helped by improved safety, which let it adjust its reserves for personal injury.
For the year, CSX earned $1.23 billion, or $2.99 a share, down from $1.31 billion, or $2.82 a share, a year ago. Annual revenue rose to $10.03 billion from $9.57 billion in 2006.
"It was another great quarter and another great year for CSX," Michael Ward, chairman, president and CEO, said in a conference call with analysts.
CSX expected a positive first quarter, listing the hauling of agricultural products, chemicals, coal, coke, iron ore, metals, phosphate and fertilizers as favorable factors.
CSX shares rose $2.21, or 5.4 percent, to $43.39 Tuesday.
CSX provides rail and other transportation services. Its rail network spans 21,000 miles in 23 eastern states and the District of Columbia. It also connects to more than 70 ocean, river and lake ports.
Agriculture stocks not dead - Squawk Box Trade of the Day
NEW YORK, Jan. 22, 2008 (Thomson Financial delivered by Newstex)
Agriculture stocks have been hit very hard in recent sessions on worries that a worldwide recession will start to starve the profits from this very popular trade.
But two conference calls Tuesday give us reason to think that the agriculture trade isn't dead, just dormant: Railroad CSX Corp. (NYSE:CSX) had a bullish conference call specifically mentioning how well it was doing because of all the Potash fertilizer it is moving on the rails. Chemical giant DuPont (NYSE:DD PRB) (NYSE:DD PRA) (NYSE:DD) Co. said its agriculture sales are off the charts.
These anecdotal data points back up Thomson Squawk Box's feeling that last year's agriculture boom will continue, driven by even higher commodity prices that will benefit from an inflationary environment and by recent interest rate cuts. In our mind, agriculture is a stagflation play. Demand for food won't dip significantly, even in a recession, and the commodity price inflation simply puts more in farmers' pockets, much of which they will reinvest in better fertilizers, new equipment and the best available hybrid seeds.
Longer-term, the agriculture trade is further aided by frequent water shortages that are driving the need for more and better equipment, especially in the West, and the need to get a more productive yield from less available farmland because of the encroachment of the suburbs. Even all the land that homebuilders have sold recently to get off their books isn't significantly adding to farm acreage.
If there's a knock on the agriculture play, it's that these rallies might be growing long in the tooth. Seed play Monsanto Co. (NYSE:MON) more than tripled from late 2006. It trades at more than 30 times forward price/earnings, versus 25.2 times its five-year average, and nearly double its current P/E ratio. Agribusiness/fertilizer play Bunge Ltd. (NYSE:BG) trades at 17.7 times earnings, but that's still above its five-year average of 14.5 times. Fertilizer stock Potash Corp. (TSX:POT) of Saskatchewan has increased five-fold from late 2006 levels, and it too trades at high earnings multiples versus the five-year norm.
But we tend to look at valuation for these plays based on P/E to growth ratios, because the growth expectations have changed meaningfully, and aren't nearly as far away from their five-year norms. Some smaller plays such as Terra Industries Inc. (NYSE:TRA) actually trades at a discount based on historical PE/G.
We're not anticipating a complete turnaround for agriculture stocks. Many of the stocks have no near-term support until they reach their 200-day moving averages. At that point, we only may see a bounce suitable for a swing trade. It's hard to bet against a downtrending market for any length of time.
But as we pointed out to Squawk Box subscribers before the open Tuesday, the agriculture space represents one of the few clear-cut thematic trades out there. Traders are likely to come back to it soon. And there's decent risk-reward for many of the stocks in the space.
Agrium Inc. (NYSE:AGU) (TSX:AGU) may become the poster child for the group; its strong bounce as it neared its 200-day exponential average could be repeated by others in the group, including Agco Corp. (NYSE:AG) and Syngenta AG. (NYSE:SYT)
Good trading guys!
LOL "nursery rhyme" i guess it wasnt this one...
Food price inflation is here to stay, warns chief of PepsiCo
Suzy Jagger in New York
The surge in the price of food will continue for at least a further two years, the chief executive of one of the world's biggest food companies has told The Times.
Indra Nooyi, the joint chairman and chief executive of PespiCo, predicted that “structural inflation for food is here to stay for another two to three years”, and that it would be propelled by government initiatives to subsidise ethanol programmes, the biofuel that is seen as a more environmentally friendly alternative to oil.
Over the past 12 months milk prices have doubled as demand for corn, the staple diet of a dairy herd, increased substantially. Corn is also used in the fermenting process to produce ethanol. The cost of a bushel of corn doubled over the same period.
Food companies have also had to cope with a rise in the cost of other raw materials such as fuel, where the price of oil broke $100 a barrel.
Last year, several food companies, including Hershey, the chocolate bar maker, warned their shareholders that the rise in raw material costs would erode earnings.
Ms Nooyi argued that consolidation in the food manufacturing sector would not address the problem of inflation. She said: “This is not about scale and taking out costs. It is about the behaviour of governments, of ethanol programmes.”
She also said that there would not be a “transformational” deal for PepsiCo, such as a merger with a rival. Wall Street had speculated that PepsiCo and Danone, the European food group, would make suitable merger partners.
Ms Nooyi said she did not see any sizeable deal on the horizon that would make financial sense for PepsiCo shareholders and explicitly ruled out any acquisition of Unilever's food business.
Ms Nooyi is not the only senior business figure to predict that high food prices were here to stay. Carl Weinberg, co-founder of High Frequency Economics, a think-tank, predicted that continuing food-price inflation, along with an expected slowdown in China, presented one of the biggest downside risks to the American economy.
Kevin Logan, senior economist at Dresdner Kleinwort, the investment bank, last week forecasted that inflation in the US would continue at between 2 and 2.5 per cent in 2008, spurred by the rising cost of food and energy. He said that Wall Street had braced itself for the inflation. Mr Logan said: “The gold market is anticipating a rise in inflation and the weakness of the dollar itself carries an inflationary threat.”
Across Asia, food is the new oil as prices surge
Sun Jan 20, 2008 9:25pm EST
By Alan Wheatley, China Economics Editor
BEIJING (Reuters) - From India to Indonesia, governments across Asia are scrambling for solutions as it dawns on them that sky-high food prices might not fall any time soon.
With food accounting for a third of China's consumer price basket and even more in some other countries, the high prices are a ticking time bomb for the region, where fuel increases periodically touch off sometimes violent protests.
"If the inflation problem gets out of hand, it could have devastating implications for not only economic but also political stability," said Yiping Huang, an economist with Citigroup in Hong Kong.
In Pakistan, where the government has blamed a shortage of flour on smugglers and hoarders, paramilitary troops have begun escorting wheat trucks to deter thieves.
Malaysia briefly rationed cooking oil this month before the government boosted supplies of subsidized oil.
In China, where inflation is at an 11-year high, the government has taxed grain exports to boost local supplies and resorted to command economy-style price controls.
India has been considering cutting import duties on edible oil, while in Indonesia the government has subsidized cooking oil refiners and suspended a 10 percent duty on imported soybeans.
"Scrapping the tax is not sufficient. The government must ensure prices won't increase every day," said Sutaryo, who leads a group of tofu and soybean cake producers in Jakarta.
Some 2,500 of them protested in the capital on January 14 over a doubling in soybean prices since the start of the year.
The common thread in every country is unease over a sustained rally in global commodity prices that has carried wheat, palm oil and soybeans to all-time highs.
CYCLICAL OR STRUCTURAL?
Economists are split -- aren't they always? -- on how sustainable these price trends are.
In the same way that the forces of supply and demand, in the form of weaker global growth, are pegging oil back after its recent record run to $100 a barrel, some are confident that farm output will quickly respond to the signal of higher prices.
What's more, the law of averages says that last year's supply shocks, including a disease that decimated China's pig stocks, will not be repeated in 2008.
Others, though, see spiraling prices as more than a passing phase. Every year, millions of Asians move to better-paying factory jobs in cities and can afford more meat, milk and other high-protein food, boosting demand for animal feedgrains.
"We have the largest human migration in history happening right before our eyes in India and in China," said Paul Schulte, the Asian equity strategist for Lehman Brothers. "This is putting huge pressure on prices in a way that we've never seen before."
Swathes of cropland are being taken over to produce biofuels -- the U.S. Congress last month mandated a fivefold increase in corn-based ethanol by 2022 -- while China has lost 6 percent of its arable land since 1996 to industrial encroachment and desertification.
And don't forget the uncertain impact of global warming.
MUST DO BETTER
Against this background, governments must invest more to improve crop yields and modernize rural infrastructure.
More than 30 percent of the 60 million tonnes of fruit and vegetables that India produces each year is wasted for want of cold storage facilities, according to the Federation of Indian Chambers of Commerce and Industry. In value terms, that is more than Britain's annual output, the group says.
"It's imperative that land and labor productivity is ratcheted up in agriculture," said Ifzal Ali, chief economist of the Asian Development Bank in Manila.
While Ali is optimistic that farmers will ramp up production, he said there is a role in the short term for targeted cash handouts to help the very poor cope with higher food costs -- despite the strains they put on government budgets.
"Market forces by themselves will not do the trick," he said.
Economists are critical of other government policies.
Subsidies to food producers may increase supplies but at the cost of distorting the allocation of resources, while subsidizing retail prices is an invitation to smugglers. This is a problem for Malaysia, where cooking oil sells for much more in neighboring Singapore and Thailand.
Economists are particularly scathing about China's attempts to cap prices, which tackle the symptom of inflation, not the cause. Price curbs, they say, have been a failure down the ages.
"What they are doing will simply give rise to much more unrest and dissatisfaction when it turns out that these measures won't work to stop inflation," Gabriel Stein with Lombard Street Research in London said in a note to clients.
"And, after all, social unrest is one of the main reasons why the Chinese authorities are so worried about inflation."
So too, Stein could have added, are authorities across the region.
New game, new rules - Canadian Business Online, January 21, 2008
Jeff Sanford
Isn’t the Internet great? The advent of paperless communication means that the writers here at Canadian Business no longer have to worry about throwing out good content if we run out of space in the print magazine. We can put it up on the Net where word counts are never an issue.
This was the case with a story on the possible return of inflation running in the next issue of the print version of Canadian Business. One notion we weren’t able to fit into the original print story — by the time the main premise was explained we’d gotten to the end of the allotted space — involved the consequences for central banks in an era of rising food and energy prices.
As it is, the inflation numbers we see quoted most often are for core inflation, a measure of price increases that does not include rise in food and energy. The prices in those two sectors are volatile and that can obscure the central trend of inflation (as measured on items such as cars, computers and appliances). And so back in the ’70s some central bankers began to focus on core inflation. The question now, according to some economists, is whether that’s the right policy for the unique factors that many expect to push inflation up for the next couple of years.
Two of the key trends now driving inflation are the biofuel boom and a “maturation” of globalization that has seen many formerly poor workers in developing countries adopt a more Western (that is, energy intensive) lifestyle. These two trends are resulting in vast new claims on the world’s food sources (grains) and energy, and that’s pushing up prices in the two sectors that have been “counted-out” of inflation over the last 25 years. Might this thinking have to be revisited?
Benjamin Tal, a senior economist with CIBC World Markets, thinks so. “The issue with regard to inflation and monetary policy is that, until now, the bank has only focused on core inflation. What we are saying is that core inflation will not be as relevant in an environment in which food and energy prices are rising in a structural way,” says Tal.
That is, central banks are going to have to start looking at “all-item” inflation numbers again and take into account increases in food and energy prices in a way they haven’t for a generation. “We moved to a focus on core inflation in the ’70s when oil prices went to the sky because of geo-political problems, which was a cyclical story. But this is not about war or cyclical problems. This is a structural change. This is not a cyclical story of food prices rising and falling on the weather. This is a structural story involving one-time increases in energy prices, biofuel production and new demand for food grains,” says Tal. “As a result all-item inflation is becoming more and more relevant.”
The consequence for central banks is clear, explains Tal. “You don’t want to conduct monetary policy on cyclical spikes, but what we’re saying now is that these aren’t spikes. These structural changes have been with us for two or three years and will be with us for two or three years ahead.”
According to Tal, increases in the price of food and energy are significant enough that they can make the difference between cutting or raising 25 basis points. So, will the Bank of Canada and, more particularly the U.S. Fed (which is considered more beholden to conducting monetary policy on the basis of core inflation), move to a wider measure of inflation in the years ahead? “I think that day is coming soon,” concludes Tal.
Is this the end of cheap food?
Sunday January 20, 2008 The Observer
Outside a Co-op supermarket in Edinburgh on Friday, I met three sisters, all doing their shopping for this weekend. In their baskets were tins, mainly - Ambrosia creamed rice and minted peas. They were peering at stickers and examining labels with the look of hardened sceptics.
'Terrible, just terrible,' said Betty Pryde, at 82 the eldest of the three. 'Look at the price of these eggs.' They were free range, and cost £1.28 for six - 60 per cent more than in most supermarkets a year ago. 'Everything's gone up.'
The sisters live apart but they often shop together, pooling their state pensions. Jean, 78, the youngest, said she doesn't bother looking at the prices, she just gets what she needs. Her older sisters looked at her as if she had just said something naughty. 'Oh no, you've got to watch the prices - bread, milk, everything, it's all going up,' said Nan, 79. And they all agreed their weekly shopping bill was up a good 10 per cent on last year, although the cost of gas and electricity was more of a worry to them.
'It's the price of oil, isn't it? And the bad weather?' said Nan, musing over the reason for the price rises. 'The shops, they all like a profit well over the score,' added Jean. 'Aye, well, I must get on,' said Betty. Clearly this was the wrong moment for a long chat. 'I want a bit of fish for my supper, and I imagine that's gone through the roof, too.'
When they had gone, the Co-op in Easter Road, Leith, was as empty as a church on Monday. But the discount grocery store Lidl, a block away in the Kirkgate shopping centre, was throbbing. Poundstretcher next door was packed, as was the discount frozen foods store, Farm Foods. And no wonder - food prices are rising faster than they have at any time since the mid-1970s. The middle class in Britain has barely noticed, but here in one of the poorer corners of Scotland, people are feeling the pain.
Everyone in the stripped-down warehouse of Lidl, where the posters promise, simply enough, '40 per cent cheaper!', had a story to tell. Shubnam Rasoul, 23, out shopping with her husband, Shahid, and their two small children, said: 'I never buy anything for myself any more. And I never buy anything that's full price - it's all in the sales.' Shahid, who works in a Leith butcher's shop, said that the price of their lamb is up 10 per cent since last month. 'We spend £200 a month now on groceries for the family,' he complained. Probably 25 per cent more on a year ago. It's frightening'.
While a litre of orange juice is 57p in Lidl, it sells for 99p in the Co-op. Such products, and staple foods like eggs, bread, frozen peas, butter and cheese have seen price rises of between 20 and 30 per cent in mainstream supermarkets. Mysupermarket.co.uk, which collates supermarket prices daily, puts the overall rise last year at 12 per cent. That means the average family's shopping bill has gone up by £750 a year.
From Lidl, I went to another food shop, only a mile from Leith, but a planet away in every other way. Occupying part of a terrace in the grandeur of Edinburgh's New Town, Herbie's is a fittingly stylish grocer/cafe - the sort of place where they don't put price labels on the goods in the chill cabinet because, presumably, no one is particularly bothered. If you do ask, a pint of milk here costs 75p - in Lidl it's 32p.
I was introduced to five obviously middle-class Edinburgh women, the fundraising committee of the PTA for one of the city's private schools. They were having a meeting over cappuccinos. Did any of them know how much a pint of supermarket milk cost, I asked. Eighty pence at Waitrose, said one confidently, and the others nodded. And how much has the price gone up? Not much: it's about the same, they all agreed. In fact a pint of milk costs 40p at the supermarket, and is up by 15-20 per cent on a year ago.
Two of the women - none wanted to be named - didn't think food prices had gone up noticeably. But the other three weren't so sure. They'd seen a difference in their weekly shopping bills. 'Tesco deliver,' said one. 'We're vegetarians and it's usually the same order. And it's usually £180. But it's been £200 lately. Another laughed: 'My husband's certainly noticed we're spending more.'
'Do you know,' says the third, 'I have actually started looking at labels in the supermarket. Prices per kilo, and so on.' Everyone smiles - how absurd it seems.
'It's going to be interesting,' says James Walton, chief economist with the food retail industry's education body, IDG. 'UK shoppers aged under 50 have so far never experienced food-price inflation.' Essentially, throughout most Britons' lifetimes, food has become cheaper. But, in December, the inflation rate (by the government's preferred consumer price index, the CPI) was 2.1 per cent, while for all foods it was 5.9 per cent. 'Habits will change, although it's unlikely we're going to see Soviet-style queues at empty shelves.'
However, label-watching may become a habit for those Edinburgh women, because - and all the analysts agree on this, if nothing else - this is only the beginning. Walton's organisation is funded by the supermarket industry, whose bosses are, in public, largely in denial about the significance of the price rises. But Walton, himself, forecasts two further years of similar increases, at least. All the indicators, the prices of every food staple, are on the up - wheat doubled in price at one point last year. 'It's something the industry has expected and is thus, hopefully, a manageable cycle,' he says. 'No hunger riots. But we have enjoyed food prosperity for a long time, and we're seeing the end of that.'
Others offer an even more bleak assessment. Jacques Diouf, head of the UN's Food and Agriculture Organisation, spoke recently of a 'very serious crisis' brought about by the rise in food prices and the rise in the oil price. Various global economic bodies are forecasting rises of between 10 per cent and 50 per cent over the next decade.
There have already been riots about food prices in Mexico, West Bengal, Morocco, Senegal and Yemen, although not in Edinburgh. But the factors behind the price rises in Leith are exactly the same as those in Mexico, or in China - where, last Wednesday, the government introduced price controls on dairy products, meat, vegetables and cereals. And while food price inflation hit 18 per cent last year in China, there's no good reason why they should not do that here. In fact, there are a lot of reasons why they should.
There have been four chief drivers of food price inflation in the last two years. The first is the huge rise in oil prices: $100 a barrel means food that is four-times as expensive to plant, irrigate, harvest and transport as it was six years ago. Some commodities brokers are now betting on oil going to $200 a barrel within a decade.
The second factor is the climate: drought, hurricanes and floods around the world last year made for terrible harvests - from Australia to the Caribbean and the United Kingdom. The third is the massive rise in the price of the staple-food commodities: wheat, maize and soya. This has been partly driven by speculation in the markets, partly by the demand for crops to turn into fuel.
Ethanol, a diesel-type fuel made from plants, must bear a lot of the blame. Since George Bush announced a rush to corn-based ethanol it's done well for American corn farmers - 20 per cent of whose harvest, subsidised by the government, went into fuel tanks rather than flour mills this year. Bush's taste for corn-based ethanol is based partly on trying to break the US's reliance on Middle East oil suppliers, and partly on a (largely misplaced) faith in its ecological credentials. (Its increasingly voluble critics claim that growing grain and then transforming it into ethanol requires more energy from fossil fuels than ethanol generates.)
And, as a result of the vast tracts of farmland now being given over to corn for ethanol production, the price has risen sharply. Hence the tortilla riots in Mexico, last summer, over the price rise in the corn flour that makes the pancakes. Some claim that there is now a war between the 850 million chronically hungry of the world and the 800 million motorists - all fighting for the same food crop. It's a pretty unbalanced battle: the maize to fill a tank for a 'Chelsea tractor' would feed a family of four for three months. In October the United Nations' spokesman on famine, Jean Ziegler, called the biofuel boom 'a crime against humanity'. And as the Economist magazine recently noted: 'The 30 million tonnes of extra corn going to ethanol this year amounts to half the fall in the world's overall grain stocks.'
Last week, after a mass protest at the price of soya beans in Indonesia (which rose because of the shortage of corn and other crops to supply the biofuel industry), Ashok Gulati, director at the International Food Policy Research Institute said: 'It's finally a trade-off between filling stomachs and filling diesel tanks in cars and trucks.'
But the last, and perhaps the most disturbing factor in the food price rise, is the financial boom in India and China. Around the world, and through history, people have eaten more meat as they have become richer. This is called the nutrition transition and it's now happening, very quickly, in the two most populous nations on the planet.
Hundreds of millions more people are now rich enough to eat meat compared with 10 years ago, with meat consumption in China more than doubling over the past 20 years. Meat also consumes food resources in a shockingly inefficient way: it takes 8kg of grain to produce 1kg of beef, and 4kg for pork. But each kilo of grain may need a tonne of water. And fuel oil is needed throughout the process, to fertilise the grain, pump water and to transport it.
Water and oil will both be in short supply this century. None of this is a surprise to Tim Lang, professor of food policy at London's City University, and an adviser to the government through the Sustainable Development Commission. 'I've been expecting this for two years', he says. 'The food system is entering a period of very significant restructuring, the first since the years after the Second World War. We may look back at the second half of the last century as an era of cheap food. It'll be like the Hundred Years' War, as we were taught it in school: a seminal moment in human history that's gone and will not return.'
That food is - for the rich world, at least - astonishingly cheap, is undeniable. The average British household spends 13 per cent of its income on food - for our grandparents that figure would have been 30 per cent.
In Lidl at Leith, I met a 75-year-old retired nurse with a basket of vegetables - broccoli, leeks, courgettes - along with apples, vinegar and a tin of condensed milk. 'I make jam and I pickle things,' she explained. 'My daughter thinks I'm mad, but it's a habit. I got married in 1948, when things were still rationed. We appreciated everything we got to eat. Now, we've got used to having too much. We throw so much away. People eat unwisely - they don't plan, they just shop.'
But could there be positive aspects to the food price rises? Some environmentalists believe so, including Tim Smit, founder of the Eden Project, near St Austell in Cornwall. 'Food is ridiculously cheap and we need to pay more - for our environment to be healthy, to cut down on carbon emissions and give more income to our farmers,' he said. 'It's said that 30 per cent of all food produced in Britain is thrown away. We may be getting back to seeing what the real price of food is, and that is healthy for producers and for society.'
So is there a morally preferable price level for food, at which people will value it more, and waste less? Raj Patel, a political economist at Cornell University in California, and author of Stuffed and Starved - on the politics of global food supply - says that allowing the market to set prices to make people behave better is not the answer. 'There are greens who are crowing that the price of food going up is going to benefit the environment and help the small producer,' he says. 'But the benefit of the rises is going to the contractors and the commodity brokers - not to the farmers or to developing world economies. Nor are supermarkets innocent victims of price rises. Sainsbury's and Tesco have recorded double-digit growth in profits last year.'
The supermarkets insist there's no problem. Tesco's finance director, Andrew Higginson, says that 'tales of rampant inflation, based on one or two products, are complete nonsense.' When I asked Sainsbury's about the reported 26 per cent rise in the cost of a basket of its food, it said that its prices overall had actually only risen by 1 per cent in 2007. As an illustration they sent me a list of five items that had become cheaper, including 200g of Sainsbury's mixed olive hummous which was 20 per cent down.
Dismissing 'alarmist predictions,' British Retail Consortium's head, Kevin Hawkins, said last week that 'intense competition between food retailers was continuing to keep prices down, with retailers absorbing much of the impact of increasing costs themselves.'
But as the situation stands today, at least a third of the world - including the populations of China, Russia and India - have government-imposed price limits on their foods.
'That's how it's going, says Lang. 'You can't wriggle out of the facts. There are water shortages, climate change, energy price rises, population demographics, waste. We can't go on eating meat the way we do: the economics of it just won't add up.'
He's not expecting food riots in Britain -yet. 'But we're entering a long period of restructuring, and politicians will have to get involved,' he says. 'For years, successive governments have got used to food prices going down. The "leave it to Tesco" policy has dominated. But that's over. After half a century, food security is on the political agenda again.'
And so, you imagine, is hunger.
One family's trolly trials: 'every week we get less change at the checkout'
Simon Russell and his wife Pauline have found that feeding their two growing boys quality food is becoming increasingly expensive.
Waste manager Simon, 41, office worker Pauline, 43, 11-year-old Liam, 11, and Ben, eight, pictured right, live in Emersons Green, Bristol, near to several major supermarkets. They currently spend around £150 on food, and try to buy good quality meat and fresh vegetables whenever possible.
Typical meals include Pauline's 'spag bol', a good quality homemade fish pie, and a roast with all the trimmings every Sunday. A year ago their weekly food bill was nearer £120, and, Pauline says, it is not just her children's larger appetites that are the problem.
She said: 'You really can see the difference at the checkout week-by-week at the moment. It's not like things have doubled in price, you just get less and less change. I always try and buy quality food, I think very cheap food is a false economy. By the same measure a lot of organic food is overpriced. I try and find a happy medium.
'Children and parents are being told how important good food is, but as prices rise it gets harder to buy the nice things that you want. If you try and stick to the same budget, you just end up with a half-empty shopping trolley.
'I don't go to Sainsbury's very often, although I'd like to, as the quality and range of food there tends to be better than the rest. However, I end up driving further to go to Asda or Morrisons because of the money you save. It could be as much as £10 a week. That may not seem like a lot, and we're not struggling financially, but when you add that up over a year that could pay for a family holiday.
Simon added: 'Family meals are a very important part of our life, and we always sit round the dining table together. I believe in fair trade; farmers and producers deserve to get paid a decent price and to keep short-changing them is unsustainable. But with other prices rising, we have to keep things in perspective and make sacrifices.
'It's not just food prices that are rising. Energy bills are already shooting up and petrol is never going to get any cheaper. All families are going to have to make sensible savings.'
There is a reason its resisting the rack sag
http://investorshub.advfn.com/boards/read_msg.asp?message_id=25195259
Potash One will have access to capital looking for a quality project.
In this environment BHP could put the brakes on Anglos project and Athabasca is more hype than hope to build an underground mine.
Potash One the only realistic potash junior near term producer.
Ok you got it, we got the bargains today in Canada.
Thanks, here is some info that I think has been overlooked...
REGINA, SASKATCHEWAN, Jan 7, 2008 (Marketwire via COMTEX) -- Viterra (TSX:VT), Canada's leading agribusiness, is pleased to announce the appointment of Andrew M. Muirhead, MBA, CA, as Senior Vice President of Corporate Development.
Reporting to the President and Chief Executive Officer, Mr. Muirhead will lead Viterra's strategic business development and growth.
"We are very pleased to have Andrew join our team. He has excellent corporate business development knowledge and tremendous experience in the capital markets. He will work with our Senior Management team to accelerate our company's strategic growth plans, leading our team to successfully execute on prospective initiatives to drive value. His strong record of execution will serve Viterra and its stakeholders well, as we assess global opportunities," said Mayo Schmidt, President and CEO of Viterra.
Mr. Muirhead is a former Vice President and Director of Investment Banking at TD Securities Inc., and prior to joining TD Securities, he held the position of Executive Director, Mergers & Acquisitions, for CIBC World Markets. During his investment banking career at TD Securities and CIBC, he acted as a senior advisor to numerous public companies, offering his expertise and leadership in mergers and acquisitions and corporate finance.
Mr. Muirhead's appointment to Viterra is effective immediately. He will be based in Calgary, AB.
Saskatchewan Wheat Pool Inc., doing business as Viterra, is Canada's leading agri-business, with extensive operations and distribution capabilities across Western Canada, and with operations in the United States and Japan. The new company is diversified into sales of crop input services and equipment, grain handling and marketing, livestock feed, agri-food processing and financial products. These operations are complemented by value-added businesses and strategic alliances, which allow Viterra to leverage its pivotal position between Prairie farmers and destination customers. The Company's common shares are listed on the Toronto Stock Exchange under the symbol VT.
I think the company will release news Monday morning propelling the stock over $5.
A joint venture with Mosaic or Viterra to build a pilot plant would do it.
Observations from NE and WI Agri Expo Tradeshows
http://investorshub.advfn.com/boards/read_msg.asp?message_id=26130425
Viterra says farmers optimistic
Posted: January 19, 2008, 2:48 PM by DrewHasselback
Agriculture
Saskatchewan Wheat Pool, which now carries on business as Viterra, says farmers have pre-purchased about $250-million worth of seed, fertilizer and corp protection products in advance of the coming growing season. That's about $100-million more than Viterra had expected.
"This activity level provides one indication of the optimism in the farm community and the improved financial health of agriculture in Canada," said Viterra's chief executive, Mayo Schmidt.
"Farmers have begun to secure the product they will need to capitalize on rising commodity prices. We are encouraged with the level of pre-purchases to date and look forward to working with our farm customers to help capture the opportunities in this positive economic environment."
Optimistic "Malthus-iasm"
Saturday, January 19, 2008; Posted: 07:30 AM
Jan 19, 2008 (Zacks Investment Research via COMTEX) -- With the U.S. headed into a recession of unknown depth and duration (much will depend on how fast we get fiscal stimulus and how effectively designed it is) one of the most important questions is to what extent will the U.S. drag the rest of the world down with it. Historically, when the U.S. gets a cold, the rest of the world get pneumonia. However, for some time now, the U.S. has not been the locomotive of the world economy, rather the biggest boxcar on the train. The real engine for world economic growth has come from China, with quite a bit of help from India, Brazil, Russia and the rest of the emerging economies. This is particularly true of production, or the supply side, of the equation. The U.S. has continued to be the biggest player on the consumption, or demand side of the equation. So what happens when the U.S. consumer slows down or goes into reverse? How much does that cause China to slow, and could we see a Chinese recession? Well, there is no law that says that the only people who can consume the goods being produced in China are Americans. Indeed, China does more trade with Europe than it does with the U.S. Also, China has built up truly massive foreign exchange reserves, reserves which have been growing by hundreds of billions each year. China could spend some of these reserves to keep things going over there. Remember that China still has hundreds of millions of people who literally dont have a pot to, well, you know. Perhaps the Chinese could start consuming some of their own production. With very high savings rates there, it certainly seems possible. While it is popularly perceived that Chinese growth is entirely driven by exports, particularly exports to the U.S., this is not the case. China has been investing very heavily in its infrastructure, as well. Still, given the relative sizes to Chinese consumption and U.S. consumption, it takes some very heroic growth rates by the Chinese to make up for a slowdown here.This question has enormous implications, particularly for the commodities markets. Over the last few years, commodities have been on a tear, and it has not just been one or two commodities either. Oil has been the most prominent, but gold, industrial metals and grains have all doubled or tripled. Some have wondered if just as the housing bubble replaced the dot.com bubble if we are now seeing a commodities bubble replace the housing bubble. The liquidity being pumped into the system has to go somewhere. Oil, given the potential that we are near world-wide peak production is probably a special case, but what about the others? Lets consider grains for a bit. One of the founders of Economics, and the reason it is called the dismal science, was Thomas Malthus. He argued in the early 19th century that since land under cultivation is limited and can only grow arithmetically, while population grows geometrically, that the world would always tend towards starvation, and keep grain prices high. Fortunately a series of events, such as the opening of the U.S. West to large scale cultivation, the introduction of tractors and combines, the green revolution, etc. have proved Malthus wrong. Today, there are two huge factors which are pushing up grain prices. First we are burning rather than consuming a large portion of our crops in the form of ethanol. Given government mandates, this process will continue. Second is the emergence of a large number of Chinese (and Indians) into something resembling a middle class -- for the first time in history. This is an epic change and one of the greatest economic developments of all time; in many ways it is more significant than the Renaissance or the Industrial Revolution. However, it takes several pounds of grain to produce one pound of pork. As the Chinese move toward having a first world economy, its citizens are demanding first world diets. This is good news for the entire agricultural complex. Some of the more prominent beneficiaries of this are Monsanto (MON), Deere (DE) and Potash (POT). However, in grains, the cure for high prices is high prices. It will cause farmers to plant more acres (both here and abroad) and eventually bring prices down. If the slowdown by the U.S. consumer causes Chinese economic growth to slow significantly, the shift in their diets would also slow and cause a sharp decline in prices.A similar process has been place for the metals, both precious and base. For gold, it is simply the case that historically Chinese and Indians have a much higher propensity to hold their wealth in the form of gold and silver than Westerners do. As they have gotten wealthier, demand has gone up (a very weak dollar has also helped). For the base metals, think of the amount of copper it takes to wire hundreds of millions of houses for the first time. Think of the amount of steel that has gone into projects like the Three River Gorges, and building all the skyscrapers of Shanghai and Beijing. These trends have been extremely beneficial to base metal companies such as Freeport McMoran (FCX), Southern Copper (PCU), Vale De Companhia Rio (RIO), not to mention the gold miners like Newmont Mining (NEM) and American Barrack (ABX). A Chinese slowdown would certainly take the wind out of their sails (and sales).In short, I expect that there will be a slowdown in China, but not a full fledged recession. Short-term, many of the commodities seem over-extended and are likely to pull back, perhaps significantly. However, consider it a major correction in a long-term up-trend, not the popping of a bubble. The underlying trends are real. Ironically, Malthus might be the most compelling reason to be optimistic about the world economy over the long term. Read the full analyst report on POT.
Once on the ropes, agriculture is again a growth industry
Ray Turchansky
For Canwest News Service
Saturday, January 19, 2008
It's hard to believe that less than a decade ago the agriculture industry, at least in Canada, seemed to be on the ropes.
Protectionist policies by U.S. politicians were producing a glut of grains and had driven down global prices.
Then Western Canadian farmers, constantly fearful of "the Great White Combine" that is hail, suffered their worst drought in ages. And of course there was mad cow disease, which greatly restricted U.S. and other global beef markets to Canadian farmers.
Now, not that many years after profits were drying up and many farmers were deserting the industry, corn prices are near an 11-year high, soybeans are selling for the most money in 34 years, and wheat is near its all-time record of $10 a bushel. As a result, agriculture is one of the hottest sectors to invest in.
An agriculture exchange traded fund in the U.S., ticker symbol MOO on the American Stock Exchange, is up 43 per cent in the last four months. Top holdings are Mosaic Company, Monsanto Company, Potash Corp. of Saskatchewan Inc., Komtsu Ltd. and Deere & Company.
In Canada, the Claymore Global Agriculture ETF, ticker symbol COW, debuted Dec. 19 on the Toronto Stock Exchange and its price rose 11 per cent in just over two weeks. The top holdings are similar as MOO's, except for Syngenta instead of Komtsu among the top five, and with Agrium among the top 10.
The recovery has been spurred by two major developments. In India and China, emergence of a populous middle class has increased dietary demand for meat and therefore animal feed, at the same time that swelling cities are encroaching on farmland. And in the United States, the government is subsidizing the growing of corn to produce ethanol and wistfully to wean Americans off using fossil fuels to drive their autos.
Don Coxe, global portfolio strategist at BMO Financial Group, related on BNN television how he visited family roots in rural India, where broadband is snaking onto farms and computers now show the latest commodity prices on the website of the Chicago Board of Trade. Enlightened farmers suddenly demanded the Indian government no longer pay for eggs in rupees, thus producing "a true global pressure price on food cost."
At the same time, the American midwest, which Coxe describes as "the Saudi Arabia of corn," has had 16 years of great growing conditions and is "way overdue for bad weather ... and if that happens, we're going to have the worst food crisis in modern time, maybe in centuries, because this time the whole world would tie in."
Coxe says food prices are also spiking because of the United States' misplaced faith in ethanol as an environmentally friendlier and financially cheaper form of fuel.
You may recall the words of Warren Buffett's partner Charlie Munger at last May's shareholders meeting of Berkshire Hathaway: "I think the idea of running automobiles on corn is one of the dumbest ideas I've ever heard. You want a social safety net under people, and the most basic safety net is food. You're going to raise the cost of food so you can run these automobiles around, and you use up just about as much hydrocarbons making the corn as you get out of the ethanol. And you don't count the cost of the topsoil that blows away."
Coxe said John McCain, who didn't even campaign in corn-rich Iowa before capturing New Hampshire, is the only U.S. presidential candidate to speak out against the folly of growing corn for ethanol.
Coxe says the agricultural ETFs are a good way for investors to gain exposure to the market, noting that historic farm equipment manufacturer Deere & Company, which was dismissed by financial analysts in a Wall Street Journal article last May as being too cyclical and expensive, has doubled in share value since.
Similarly, last March, RBC Asset Management senior portfolio manager Brad Willock said that "potash is probably better than the oilsands." Sure enough, Potash Corp. of Saskatchewan shares have gone from $52.45 a year ago to $145.53 early this year. And the new kid on the Saskatoon potash block, Athabasca Potash Inc., had its initial public offering of $4.25 on Dec. 13 leap to $10.45 mere weeks later.
Coxe said it will take years to get back to food surpluses, when production of 30 bushels per acre in India improves to the 200 bushels an acre level in Illinois, which needs to be done "with fertilizer, seeds and technology."
As an investment, he said "fertilizer has actually outperformed gold."
Potash Corporation of Saskatchewan (POT) NewsBite - Upgrade Boosts POT
Posted on Friday, January 18, 2008 10:22 AM
Potash Corporation of Saskatchewan (POT) opened at $123.19. So far today the stock has hit a low of $122.71 and a high of $126.74. POT is now trading at $124.88, up 4.64 (3.86%). After hitting a one-year low of $45.83 last January, the stock hit a one-year high of $152.44 on Tuesday. POT shares are rising this morning after Scotia Capital upgraded the stock to "Sector Outperform" from "Sector Perform." Technical indicators for POT are bullish and deteriorating. If you’re looking for a hedged play on this stock, consider a February bull-put credit spread below the $90 range. POT hasn't been below 90 since September, and could lose up to 27.9% before this trade loses money. [LHF- Seven Summits Strategic Investments NewsBite]
Could not agree more Catchnrel.
Selling into strength, buying into weakness is my remedy for my bottom calling inadequacies.
Does not sound like growers are going to let high input costs for fuel, ferts etc stand in the way of them maximizing thier yields this year.
Apply lots of ferts, buy that new combine, replace those old grain bins, plow up that slough.