Duxton’s Agri Bits and Pieces Vol. 88

Quote of the week:

“Today the disaster is real, whereas to some degree the big run-up in prices in 2008 was speculatively driven”

David Nelson, global strategist at Rabobank. The world may be facing another impending food crisis as the worst US drought in more than 50 years pushes agricultural commodity prices to record highs, The Financial Times, reported this week. In 2007-08, a rise in prices triggered food riots from Bangladesh to Haiti as the number of hungry people in the world surpassed 1bn.

1)      Four reasons why we may not have to face another food crisis:

There have been several viewpoints expressed over the past few weeks arguing why comparing the current run-up in selected food commodity prices -driven primarily by the drought in the US -to the 2008 food crisis may be a bit of a stretch. Here’s a summary of a few interesting ones:

1. The current drought isn’t at Dust Bowl levels, though it’s very large from a historical standpoint (See chart of the week). Although it is more widespread than…

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Duxton’s Agri Bits and Pieces Vol. 87

Quote of the week:

“ You couldn’t choreograph worse weather conditions for pollination. It’s like farming in hell”

Fred Below, a plant biologist at the University of Illinois in Urbana to Bloomberg news this week. The worst U.S. drought since Ronald Reagan was president is withering the world’s largest corn crop putting the global economy at risk of its third food inflation shock in five years. More than 1,000 counties in 26 states are being named natural-disaster areas, the biggest such declaration ever by the US Department of Agriculture (USDA) as drought grips the country’s Midwest. Crops on July 1 were in the worst condition since 1988, and a Midwest heat wave last week set or tied 1,067 temperature records, government data show. Prices surged 37% in three weeks, and Rabobank reckons corn may rise 9.9% more by December to near a record $8 a bushel.

1)      Beware of the little boy

The impending El Nino weather pattern could cause ripples in the agricultural markets across the world

The Japanese are saying it too: El Nino is coming! The…

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Duxton’s Agri Bits and Pieces Vol. 86

Quote of the week:

“When it comes to portfolios, my personal advice is for anyone who can, put money into forestry or farmland. Long term, you would probably never come near their returns in the stock market. In the world that I see, land is golden.”

Jeremy Grantham, CIO at Boston asset manager GMO, to CNN last week. Grantham, who has attracted a cult-like following owing to his quarterly investment letters warned of dismal returns ahead for U.S. stocks in the 2000s and predicted the bursting of both the technology and housing bubbles. In his March 2009 letter he advised snapping up U.S. stocks just as they were plunging to their nadir in the financial crisis. Those who bought profited from one of the most powerful market rallies ever.

 Full interview here: http://cnnmon.ie/L1lSHj

1)      Goldman bullish on Ag as US crop wilts

Global food markets are bracing for a price uptrend as fields lay parched in the world’s largest agricultural producer

Goldman Sachs is “very positive globally” on the agriculture sector, in part as dry…

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