Jim Rogers calls a next bubble in food again

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

And there you go. After chasing me about investing in things to perfection, I finally make you put up what was NOT 100% perfect at the time of forecast.

Strange, neither the word perfection nor the words perfect prediction are anywhere written in any post I put up.

I asked you, and continue to ask you, for some data which supports your thesis.

iTulip provided such data in 1999, provided such data in 2001, and provides such data today.

You continue to not provide such data.

See c1ue, you chase me for the kind of information you would not provide, and when you did, your own info from 2001-2002 does not show that everything works out exactly as one expects it will.

Again I'm unclear what you're trying to say - given that I provided exactly the links you asked for. These links and thesis are what itulip.com are predicated on.

My assumption - apparently faulty - was that anyone who has spent as much time on iTulip.com has you have would have at least some familiarity with the iTulip thesis. Since you've shown your ignorance, I then provided the links.

Yet somehow I am not providing information now?

And is that not the nature of investing? We can only take the best information available to us, analyze it appropriately from our own viewpoints, and then invest (or not) accordingly. there simply is NO SURE THING, because if there were, we would all get on board and soon it would be a bubble and crash from over-value.

You did NOT meet the burden of proof you put on me. Think about that the next time you go chasing someone tail trying to prove what you yourself cannot -- the no-risk perfectly cast, no fail, investment. The economy is dynamic, the world is dynamic, things can change, interfere. Get a c1ue.

Oh, and BTW, yes, I had read the thesis, and tat is how I knew you were full of yourself when you started this debate. I just had to make you prove for all of us.

Nowhere have I asked you to provide a perfect thesis.

I have asked, and continue to ask, for data you may possess beyond your feelings.

If you don't have this data, that's fine.

I also asked for data on areas which you specifically are engaged in - i.e. the economics of farming in Uruguary - and to compare vs. your own stated opinions on how your operation compares with a Brazilian industrial farm.

You also didn't provide this.

So while you continue to try and attack me, all simply because I do not agree with you and furthermore ask that you provide some evidence, all you do is highlight the lack of rigor in your own thesis.

I've deliberately not been confrontational, but clearly I've attacked your sacred cow and you're reacting in a non-constructive manner.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Strange, neither the word perfection nor the words perfect prediction are anywhere written in any post I put up.

I asked you, and continue to ask you, for some data which supports your thesis.

iTulip provided such data in 1999, provided such data in 2001, and provides such data today.

You continue to not provide such data.



Again I'm unclear what you're trying to say - given that I provided exactly the links you asked for. These links and thesis are what itulip.com are predicated on.

My assumption - apparently faulty - was that anyone who has spent as much time on iTulip.com has you have would have at least some familiarity with the iTulip thesis. Since you've shown your ignorance, I then provided the links.

Yet somehow I am not providing information now?



Nowhere have I asked you to provide a perfect thesis.

I have asked, and continue to ask, for data you may possess beyond your feelings.

If you don't have this data, that's fine.

I also asked for data on areas which you specifically are engaged in - i.e. the economics of farming in Uruguary - and to compare vs. your own stated opinions on how your operation compares with a Brazilian industrial farm.

You also didn't provide this.

So while you continue to try and attack me, all simply because I do not agree with you and furthermore ask that you provide some evidence, all you do is highlight the lack of rigor in your own thesis.

I've deliberately not been confrontational, but clearly I've attacked your sacred cow and you're reacting in a non-constructive manner.

The data for my "sacred cow" is all over the net. From topsoil loss, to water table drops, to changes of weather patterns based upon the Pacific Decadal Oscillator, to decrease in yields due to science, to estimates of available land that can still be converted to farmland, to population growth estimates, to youtube videos about exponential growth, to god knows what else. I have done plenty of reading over the years before I committed to the course of action I chose. I am sorry I don;t have a handy list of links for your "proff of concept" ideal.

As I have said numerous times, and you gloss over it,this is not a chemistry proof. there are plenty of moving parts, just like in the gold thesis (which did NOT work out exactly as planned, and with less data than what I believe I have read to date).

If you think I am wrong, rather than make me justify my position, why not prove me wrong? Putting up one or two date points in thie arguement has been ridiculous on your part and indicates to me you really have know knowledgeof industrial agriculture whatsoever. You see it as a failure of my justifying my position, but frankly, and let me say it again, I do not HAVE to justify my position to you. I am more than comfortable with my decisions.

You don;t like my thesis, prove me wrong, don't expect me to spend my time proving me right.

You know, oddly, you have an Uruguayan on ths board who agrees with my position, and he is involved in the ag space no less. Should ha have to prove his merit and qualifications to you?

Frankly c1ue, I have see other guys like you on other boards. You come across as a bright, but "gotta win" and any costs kind of guy. You're the kind of guy who wants to make people spend all their time spinning their wheels to meet YOUR satisfaction. I am not here to meet your satisfaction. I am here to learn, and pass on what I do and have learned. I am not here to write a book about my knowledge for your approval. I am not here to satisfy YOUR needs.

You see this as a personal attack. It is not, it is just me calling you out on the way you have handled this issue. Don;t like what I have to say?

PROVE ME WRONG. Simple. You failed at the gold thesis timeline, and you'll fail again.

I'll spend my time doing and reading more interesting things than satisfying the needs of someone I don;t know who, frankly, really has added nothing to the conversation.

EDIT: BTW, i'd be interested to know exactly how much of your personal wealth you have committed to gold since 2001.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

The data for my "sacred cow" is all over the net. From topsoil loss, to water table drops, to changes of weather patterns based upon the Pacific Decadal Oscillator, to decrease in yields due to science, to estimates of available land that can still be converted to farmland, to population growth estimates, to youtube videos about exponential growth, to god knows what else. I have done plenty of reading over the years before I committed to the course of action I chose. I am sorry I don;t have a handy list of links for your "proff of concept" ideal.

Provide some data.

You keep coming up with these aphorisms, but none of these are new. Where is the evidence that the end is near?

Europe and China have been farmed for literally thousands of years. Topsoil loss has occurred, but why is it now that the peak has been reached?

As I have said numerous times, and you gloss over it,this is not a chemistry proof. there are plenty of moving parts, just like in the gold thesis (which did NOT work out exactly as planned, and with less data than what I believe I have read to date).

Except one little inconvenient problem: the reason the 1999 and 2001 iTulip theses did not pan out as originally envisioned was because a political decision was made.

None of the rationales you outline above are political. They are physical. As such there should be some evidence of the 'end'.

Semiconductor physics, for example, has a clear physical trend which is leading to the maturation of that industry. Starting with 65 nanometer, the previous linear improvements to area density and transistor speed have rapidly declined. There is still improvement, but it is much smaller - combined with the geometric increase in cost has led to a decimation of silicon design startups.

http://www.engr.sjsu.edu/ges/media/p...%20Extreme.pdf

45 vs 22.png

It is quite clear in this example that costs are rising far faster than benefits between the 45 nm, 32 nm, and 22 nm technology nodes: throughputs are increasing in fractions, but reticle costs are increasing geometrically. The actual delta is even worse than this shows: the cost for producing the first chip is literally orders of magnitude greater at 45 nm than 180 nm.

This is an example of evidence behind a theory.

If you think I am wrong, rather than make me justify my position, why not prove me wrong?

I've put up evidence counter or inconsistent with your thesis, but instead of discussing said evidence, you choose to attack it or attack me.

I've asked you to lend your expertise to put some data behind your assertion, still nothing.

So you can continue to attack me all you want; I have gone out of my way to be respectful and to ask you to both contribute material first hand information that you have as an industrial ag farmer in Uruguary, as well as to provide some data to support your views.

As you continue to try to attack me personally, clearly your position is one of belief rather than one of substance.

Maybe your belief is right, maybe it is wrong, but ultimately it is of no use to anyone making a sober analysis of the value proposition.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Ag is subject to political decisions as well as weather decisions. did you not catch when Russia embargoed all grain exports due to a bad harvest just a few years ago?

And WHERE did I EVER say "the end is near'? All i've ever said is I believe ag is a good investment for the long term for a variety of factors.

I'll tell ya what, why not disprove the ag industry as represented by one of the larger publications online:

http://www.dtnprogressivefarmer.com/...6-582066285d77

FULL story set here: http://www.dtn.com/ag/food_security/

Ag's Greatest Challenge - 2 Producers Prepare to Serve Billions and Billions Fri Sep 9, 2011 06:44 AM CDT

By Barb Baylor Anderson Progressive Farmer Contributing Editor With more of the world hungry for red meat, America's beef exports have nearly doubled from 1991 to 2010. (Photo credit: Sam Wirzba) EDWARDSVILLE, Ill. (DTN) -- America's livestock producers are poised to share bragging rights with a certain fast-food giant on the number of satisfied customers. Despite industry consolidation, environmental and regulatory pressures, and now record-high feed costs, market watchers predict continued growth in global protein demand could bode well for the future of the country's beef, pork and poultry producers. "Protein demand in developing countries has grown quickly as consumers eat more and diversify diets," says Ron Trostle, USDA Economic Research Service (ERS) economist. "Demand will likely continue to expand rapidly since incomes in these countries are far from where food demand becomes saturated. They already account for more than 80% of global population and will experience large population gains, increased urbanization and middle-class expansion." Erin Daley Borror, economist with the U.S. Meat Export Federation, says China is expected to lead the charge in growth in meat consumption with gains likely from the Middle East, Mexico and Russia. China's cumulative pork, poultry and beef consumption is estimated at 72.5 million metric tons (mmt) and is expected to exceed 89 mmt by 2020, thanks to a growing middle class. China's share of U.S. pork exports has increased from 3% in the early 2000s to 9% in 2007. In the first four months of this year, China had already accounted for 11% of U.S. pork and pork-variety meat exports. Despite ongoing challenges, the nation's livestock industry has seen healthy growth. U.S. beef and pork production increased from 10.5 mmt and 7.3 mmt, respectively, in 1991 to 12.05 mmt and 10.19 mmt in 2010. At the same time, U.S. beef exports have grown from 539,000 metric tons in 1991 to 1.04 mmt in 2010. Pork exports have jumped from 128,000 metric tons in 1991 to 1.9 mmt in 2010. "Even under current market conditions, the U.S. is a cost-competitive, highly efficient red meat producer," Borror says. "Increasing regulations and rising input costs could be a concern, and higher meat prices could effectively slow consumption growth globally. But international customers are outbidding U.S. consumers for U.S. beef and pork. Export demand has helped the U.S. red meat industry pass on higher feed costs. That trend is expected to continue." EXPENSIVE FEED (as in industrial ag grain c1ue) High feed costs represent the most immediate challenge to livestock and poultry producers. Steve Meyer, president of Paragon Economics, contends the higher costs and accompanying volatility are due primarily to federal ethanol policy. "Corn production is at record levels. Ethanol use has increased at a faster pace than corn output, now accounting for more than one-third of the U.S. crop," he says. As a result, the livestock and poultry feed sector has gotten squeezed. For 2011-12, feed/residual demand is forecast by USDA at 5 billion bushels and ethanol demand for corn at 5.05 billion bushels. This is the first time corn use for ethanol has been higher than corn use for feed. Meyer believes pork producers are at the "edge of the cliff" with the corn crop and will have to adjust to higher cost levels and carcass break-evens greater than $80 per cwt. "U.S. livestock and poultry sectors will have a tough time delivering to the world if the total supply of high-energy feed ingredients (such as corn) is shrinking," he says. "It may be possible to improve feed efficiencies enough to do that, but it will be a slow, difficult process that will almost certainly result in much higher food costs." Recent weather woes aren't helping. The feeding segment is the hardest hit segment for U.S. beef production, especially in the Southwest, where drought has forced cow herd liquidation. Feeder cattle replacement costs have climbed 50%. Feed represents more than half the costs for cow-calf producers. Dan Shike, University of Illinois ruminant nutritionist points out, "Efficient producers can manage feed costs and remain profitable. If you can get creative and feed things like soybean stubble or cornstalk bales, and use fall/winter grazing, you can see satisfactory savings." COMPETITION FOR ACRES High corn prices, however, could entice some cattlemen to plow up hay and pasture ground, taking away easy feeding options. "We are not producing more land, and we can lose acres to corn," Shike admits. "But the issue is regional and not one to be too overly concerned about at this time." ERS data show shifts in land use are much more frequent between idled cropland and cropland used for crops than between idled cropland and cropland used for pasture. That's because idled cropland is generally more suited for returning to crop production than pasture. In the latest USDA Major Land Uses Study, which pre-dates the recent price run, cropland area from 1997 to 2002 declined almost 14 million acres. That included a 6-million-acre drop in cropland pasture. Changes were more than offset by an increase in grassland pasture and range, and special-use areas. Lands exiting cropland showed 43% going to pasture. (might this be the more marginal lands I refer to? hmm...) OPTIMISTIC INDUSTRY Skyrocketing land values, however, may crimp some land-use opportunities. Meyer points out high-priced land and high-capital requirements may also limit the ability of producers to diversify into pork production. Still, he predicts the U.S. will continue to be a pre-eminent pork supplier, given production efficiencies, the best processing plants and a feed cost advantage. Meyer adds the U.S. can grow pork productivity to meet demand without increasing the nation's sow herd. Bill Donald is equally optimistic about U.S. beef production. The National Cattlemen's Beef Association president welcomed two sons back to his operation to expand cow-calf production. "We are feeling the pinch of higher input costs, but selling feeder cattle at record-high prices has kept margins in the black," says the Montana producer. "The U.S. has the smallest cow herd since the 1950s. We see signals to rebuild, so we are doing that while profit potential is good." Editor's Note: Growing enough food to feed a hungry world will create new opportunities for America's farmers. But it also means greater volatility and uncertainty for your financial future. See c1ue, I keep up with the industry info, how about you?

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

oops, lets put up a clip from another article, shall we...

I guess all these ag ministers are really getting together for hooker parties instead of worrying about feeding the world.

http://www.dtn.com/ag/food_security/9.cfm

Agricultural ministers of the G20 countries focused on food security at the Paris meeting this summer, calling for more research and improved productivity to reduce supply volatility. About the same time, the Global Harvest Initiative group (www.globalharvestinitiative.org) issued a report outlining a $90 billion annual shortfall in agricultural research funding. That gap makes the task of doubling agricultural productivity in 40 years a formidable one, says William Lesher, the group's executive director.

Mutual resourcefulness. Yet, it's crucial the world's farmers find ways to do it. "We have the tools to be successful in meeting the great global challenge of our time—to essentially double agricultural production to meet the demands of the nine billion who will crowd our planet in the year 2050," says Jim Borel, DuPont executive vice president.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

time for more...

i'm sure none of these people has a c1ue what they are talking about, they should just check in with you, right c1ue?

http://www.dtn.com/ag/food_security/volatility.cfm

A perfect storm. The recent rapid commodity price run-up is not new; it's the result of a perfect combination of market-moving factors. As with the price runs in 1971 to 1974 and 1994 to 1996, USDA's Economic Research Service points to factors that include U.S. dollar depreciation, strong worldwide demand for agricultural products, supply shocks and policy responses by major trading countries. In the previous two scenarios, market adjustments eventually brought prices back down.

The volatility we see now is the same as in the 1970s, although at much higher price levels," confirms Dale Durchholz, analyst with AgriVisor in Bloomington, Ill. From 1973 to 1977, we grappled with what a commodity was worth. That general uncertainty permeated the supply-and-demand sides of the market. Our old economic benchmarks no longer worked"

This time around, the world again has depleted grain inventories, and China, not Russia, is buying grain. China is on pace to purchase more than half of all U.S. soybean exports, along with some corn and wheat. The U.S. wheat and coarse grains stocks-to-use ratio, which is a measure of availability, stood at 16.07% in 1973—74. That compares with 16.7% in 2006—07 and 19% in the current marketing year. The stocks-to-use ratio outside the U.S. was 13.9% in 1973—74, 16.5% in 2006—07 and about 20% today.

The United Nations Food and Agriculture Organization (FAO) notes that from July to September 2010, wheat prices surged 60 to 80% in response to drought-fueled crop losses in Russia and subsequent export ban. By December 2010, the FAO Food Price Index had topped its 2008 peak. (See Policy Plays Volatility Role") In May 2011, the index was 37% higher than the previous year. (and my investment in farmland was based upon much lower income returns...)

New volatility factors. Analysts point out today's markets are tougher to predict because of several new volatility factors.

Grain farmers, for example, need to consider the effects of global growth in other ag sectors, says Michael Swanson, chief agriculture economist with Wells Fargo.

*Corn costs for 1975 represent continuous corn; 1995, 33% continuous corn and 66% corn following soybeans; 2005, 20% continuous corn; 2011, 25% continuous corn. Beginning in 2005, soybean estimates are for herbicide-tolerant varieties. Source: Mike Duffy, Iowa State University

U.S. crop farmers must factor in fundamentals from the next loop of the system, the livestock and dairy industries," he says. Growth in global population and protein demand leave farmers more exposed to volatility. The markets have become geo-sophisticated and are influenced by worldwide socioeconomic conditions. Psychology can change at the drop of a hat" (and I use ZERO leverage, so I can "take the hit" if it comes and keep on going...)

Commodities have become an asset class of their own during the last 10 years, as well. Durchholz says money has been floating into commodities from funds.

Long-term index fund investments in commodities have gone from about $6 billion to $412 billion during the last 10 years. Another data set shows $34 billion in hedge funds in commodities a decade ago, compared with $246 billion now. It is a whole new demand base," he explains. Just as China can create a huge amount of volatility buying commodities, these funds create volatility and make for big market movements that are not going away" . (i'm sure all this money is just a bunch of uneducated rube's just like me...)

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

last one for now. don't like any of it?

PROVE IT WRONG. I'm not gonna waste my time proving it right to you. the work has already been done by many smarter than me AND you, c1ue.

http://news.sciencemag.org/sciencein...riculture.html

Report: Major Boost in Agricultural Productivity Needed

by Erik Stokstad on 13 October 2010, 2:50 PM|
Email Print|

More



With global population expected to reach 9.2 billion by 2050, food production will need to double worldwide. Meeting this challenge without causing more environmental damage—cutting down rain forest, for example, or using more groundwater—will be even harder. Farmers do tend to become more productive over time, but a new report released today finds that they will need to make much more progress—boosting their rate of efficiency gains by 25%.

"It's a rather daunting task," says Keith Fuglie, an economist with the U.S. Department of Agriculture in Washington, D.C., and co-author of the report. Major increases in agricultural research, among other investments, will be needed to do the job, he says. "Countries that have invested more in research have been the ones that have had the best record" of efficiency gains.
The report comes from the Global Harvest Initiative, a consortium of large agribusiness companies and global conservation groups, which contracted with the U.S. Department of Agriculture and the Farm Foundation, a non-profit. Fuglie calculated the "total factor productivity" for every country, comparing the amount of food produced with all the inputs needed, such as land, labor, fuel, and chemicals. He found that on average between 2000 and 2007, farm productivity worldwide has been increasing by 1.4% per year.

Fuglie also calculated that agriculture, averaged around the world, will need to become 1.75% more productive each year in order to double output without any more inputs. Because the bulk of population growth will happen in the next 2 decades, major efficiency gains are needed sooner rather than later, says co-author Neil Conklin of the Farm Foundation in Oak Brook, Illinois. "There has to be a big push now."

One reason for urgency is the long time between investing in agricultural R&D, such as plant breeding, and the eventual payoff on farms. Another problem is that climate change, which was not considered in the analysis, could reduce the amount of land and water available for farming and impact yields.

Julian Alston, an economist at the University of California, Davis, agrees that boosting agricultural efficiency is critical. But Alston, who was not involved in the report, suspects that the challenge may be even greater than depicted in the new report. Alston's research suggests that global productivity has been slowing down, not increasing.

The Global Harvest Initiative plans to release annual follow-up reports on global productivity.

************************************************** **********************************************

like I keep saying c1ue, PROVE ME WRONG. In fact, prove us ALL wrong.

We must all be a bunch of idiots in the face of your magnificence of knowledge and analysis.

[Southernguy]

Re: Jim Rodgers calls the next bubble - Food

And add desertification to all that, Sahara desert is advancing over southern Africa, and intensive soil use is accelerating soil destruction.
That´s not to say that in some near future we can see a steep fall in ag. commodities and land prices due to a big economic depression. But that is not the overall trend. Population is growing and demanding more animal protein.
By the way, there is a very important difference between gold and ag. farmland as investments: farmland is productive.
Gold is not.
So, farmland, at least in some places, always produces rent. It may be smaller or it may be greater, but that is a historically proven reality.
That is what I was trying to say talking about a reality I know well (at least I think so), Uruguay. Land prices now are historically, in dollar terms, but also in dollar adjusted for US inflation, high.
So, it is probable that at some time they shall go down, be it a little or even be it in a very significant manner. But, he who owns average productivity land or better, if it surpasses some scale (let´s say 200 hectares, for example) shall always be able to collect a rent.
In the long term me thinks land prices shall continue to go up.
Maybe we have reached "peak cheap ag. land"
And not I can´t furnish definitive proof about it.
And yes, I bought distressed land several years ago at incredible low prices. And also I sold all of it with a significant profit.
And I am not happy of having done it.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

And yes, I bought distressed land several years ago at incredible low prices.
And also I sold all of it with a significant profit.
And I am not happy of
having done it.

c1ue will tell you that is a good decision since you cannot prove ag will be a great long term opportunity.

EDIT: land prices in Uruguay are still pretty cheap from contrast to US land prices. CONEAT 170+ land would probably equal land in the US that now sells for around $6k+/acre. (sorry c1ue, can't prove that one either). We both know CONEAT does not mean anything ohter than a general guide of land quality, but in that perspective, You are still better paying for current uruguayan land that US land. I've seen some pretty low CONEAT land (140's) with soy thta would make a US farmer blush with pride.

[lakedaemonian]

Re: Jim Rodgers calls the next bubble - Food

Remember, it pays to be careful with "cheap" agricultural land.

There's been HEAPS of American and Australasian farmers jumping in head first into South American agriculture...some have done amazingly well...and there's been a few high profile failures as well.

Cheap land is relative......especially when you factor in local/regional infrastructure and costs to reach market.

One thing I've learned with farming is that while business models can be replicated reasonably well to a certain degree...it's not a McDonald's franchise by any means when it comes to best practices...best practices in farming are often quite localized and regionalized and can be very expensive to develop.

It is a real challenge....which appeals to some...and can be quite frustrating and expensive for others

[aaron]

Re: Jim Rodgers calls the next bubble - Food

Is this not the evidence that clue has been asking for ? Why did you wait?

Also, you are claiming something is a good investment - thousands of people see your posts. Clue's questions are valid. (He he has been nicer than normal too.) It is important to realize you are posting investment ideas publicly. If you are wrong, you may cause great HARM to people who might actually take your advice.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

Ag is subject to political decisions as well as weather decisions. did you not catch when Russia embargoed all grain exports due to a bad harvest just a few years ago?

And WHERE did I EVER say "the end is near'? All i've ever said is I believe ag is a good investment for the long term for a variety of factors.

I'll tell ya what, why not disprove the ag industry as represented by one of the larger publications online:

Interesting - the article you provided speaks to some of the projected gains in BRIC and emerging market meat demand:

China's cumulative pork, poultry and beef consumption is estimated at 72.5 million metric tons (mmt) and is expected to exceed 89 mmt by 2020, thanks to a growing middle class.

but also specifically says:

Corn production is at record levels.

This isn't very consistent with the thesis of farm productivity either leveling off or falling.

The article also says:

This is the first time corn use for ethanol has been higher than corn use for feed.

This is pure politics - the price of corn due to demand by ethanol producers is simply increasing the price of feed corn.

Now to address all your other snarky points in this dtnprogressivefarmer.com article:

EXPENSIVE FEED (as in industrial ag grain c1ue)

Expensive feed...for the US market. And expensive is of course relative.

What is the relative cost of your Uruguayan industrial ag grain, vs. Brazilian, vs. 'native'?

In reading the article, it seems a big factor now is not due to projected future demand from China or anywhere else, nor the ability to produce, as it is the loss of so much potential corn feed to ethanol - which in turn is entirely due to a political decision to add massive subsidies to ethanol production in the United States.

Even looking at the projected factor increase of 72.5mmt to 89 mmt by 2020: This is a 22.75% increase.

Assuming a constant growth per year from 2012 to 2020, this is a 2.3% increase. This is roughly double what existing yields are increasing, and is nice from a demand growth standpoint, but isn't a dramatic 'meet the cliff' situation by anyone's possible measurement.

So given the present yield growth rates of 1.05% or so, the article only predicts a gap of 1.25% a year, 0.5% of which is China's population growth rate.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

i'm sure none of these people has a c1ue what they are talking about, they should just check in with you, right c1ue?

I dunno, I resisted the Y2K tech bubble and the real estate bubble both. I dabbled in the Treasury bubble, but have long since exited.

Clearly I'm not a big believer in bubbles.

How about you?

But let's look at the substance of this latest snarky counterpoint:

The latest article talks all the usual talk: more people, more meat, blah blah blah.

Then it says:

Commodities have become an asset class of their own during the last 10 years, as well. Durchholz says money has been floating into commodities from funds.

Hmm. Indeed. Is ag land price true demand or simply an investment bubble? time will tell.

On to the next snark article:

With global population expected to reach 9.2 billion by 2050, food production will need to double worldwide.

This article is interesting - it notes food production yields went up 1.4% - not the 1.05% I was noting. So the difference between China's projected meat demand vs. actual yield improvements is now down to 0.9%, of which 0.5% is population growth. Hmm!

The article goes on to say that population is projected to reach 9.2 billion in 2050.

Present population is roughly 7 billion. The rate of growth thus is 0.7% each year for the 39 years from now until 2050.

Yet yields were up 1.4% per year in the article.

The article's own math contradicts itself.

(Note: if I use present population = 6 billion, the annual growth rate goes up to 1.1% - still lower than world productivity increases from 2000 to 2007)

Sorry, your 'experts' aren't doing too credible a job.

I do appreciate your informing me that even the estimates I had previously seen for yield improvements are pessimistic compared to actual improvements.

EDIT: It should be noted that the article deliberately portrayed a far higher requirement for yield improvement by saying 1.75% improvement per year would be needed to double output. But population growth from today to 2050 isn't double.

What is the actual absolute value of ag yield improvement necessary to double output in 39 years? 1.8% - significantly higher than 2000 - 2007 worldwide yield improvements, no doubt why that figure was thrown around.

[zoog]

Re: Jim Rodgers calls the next bubble - Food

The missing piece here is QEx, and the possibility of both hyper inflation/deflation. As I recall from reading about post WWI Germany, when the Mark went into hyper-inflation, the farmers made out quite well, as land (similar to PMs) maintains its' full value in both old and new "dollars."

Therefore, land in America would only be a poor investment if you believed that we have a fiscally responsible government. Unfortunately, I do not believe this, but am hoping land drops in value (to enable buyers like me) before the government(s) completely destroy fiat.

Apologies for jumping into this late, but perhaps you are not aware that the Rentenmark (the temporary German Mark after the failure of the hyperinflated fiat Papiermark) was explicitly based upon the value of mortgaged land (including agricultural), factories, and industrial goods. After about a year it was replaced, at parity, with the gold-based Reichsmark.

In a hypothetical hyperinflation scenario for the US dollar, how likely is it that the government would base the new dollar at least in part on the value of land? Even if they did, we have far more land in the vast United States than 1920's Germany, so it might not be worth as much in a relative sense. Of course there are many other places in the world to buy agricultural land, but I would ask the same rhetorical questions about the future value, and basis of value, of their currencies as well.

Agree. People talk like you can just google "how to farm".

...It all seemed so easy on paper- plant the trees and vines, water , spray once in a while, get food. Apparently there is more to it than that. When the world as we know it ends, I guess I'll need to barter with you guys for food using my other skills and assets.

...Give me a month on any farm and everything would be "not suited" for human consumption.

These comments all remind me of the first episode of the 1978 James Burke series Connections, which I and others have bought up before on iTulip. Among other things, I realized I have no idea how to farm with a horse-drawn plow. Hopefully our technologically based modern world (including the way most of our food is grown) will never completely break down.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

Where have I ever said "meet the cliff"? Where do you come up with this stuff you write? That must be some good stuff you smoke before you reply to me.

As to feed, I hate to tell you this, but feed is feed. Grains are fungible like oil, and trade for almost the same prices around the world as they do in the US. For example, wheat that sells for say $265/TT in the US on the CBOT will bring me about $250/TT in Uruguay. Of course the "middleman" grain elevator is in on that spread, as is the transport costs of the grain etc. Price is FOD CBOT, incase you didn't know.

Finally, you are quite the master of "pick and choose". You "pick" the now for corn, but choose to ignore the economic/ag studies that indicate yield is falling off when it needs to be increasing. How quaint. You look ONLY at corn, but, of course since you do not have the data, you ignore wheat, rice, soy, sorghum, sunflower, etc.

I had you pegged earlier c1ue, and I stand by it -- you're one of them smart guys who runs people ragged to try and satisfy what YOU believe is good data, while you pick and choose meaningless data points to support your beliefs and accuse others of not knowing what they are doing. I've run into this stuff before on the net, and not regarding ag either. you may be able to play this game with others, but on this subject, you will not win with me, I assure you that.

I think it is time for you to do your own research, and come back to prove me (and the ag industry) wrong, or stuff it. Srsly dude, you are embarrassing yourself.

And so we are clear, my thesis is:

1) in times of tight or rationed oil, farmers will be high up on the food chain because...
2) governments fall to starving people
3) increasing world wealth and demand for meat products means more grain allocated to feed at between 3-7 inputs per meat output
4) people used to eating meat will NOT return to eating grain as their staples, they will give up iPods and new clothes and whatnot first
5) science is no longer making meaningful increases in yields in the field
6) higher fuel prices will price out marginal land, not bring it online, due to poor yield return against input costs
7) population growth will eventually outstrip quality land for planting
8) dropping water tables in prime farming areas will take productive land out of the equation
9) longer wave weather patterns will wreak havoc on yield more frequently
10) food security will become a greater concern for nations, just like fuel security, partly because
11) food is fuel, for the body, or converted to fuel for transport (as insane a policy as it may be)

I am sure I am forgetting something in there, but I have (again) pretty much covered it.

Now again, you are welcome to prove me wrong (you will not), but please stop putting words in my mouth like "meet the cliff". I went into ag for all the reasons above. I do NOT expect them all to happen next year. I expect to be in ag for a VERY long time, and hope my kids will do the same when I am gone. If my thesis is right, my investment will not only pay off in excellent returns that either keep up with or possibly beat inflation, but my land (denominated in dollars) will increase and hold value as the value of the dollar suffers. Ag is NOT a perfect investment, and there are many issues that can arise to a farmer -- weather, pests, government policy, war, grain or fuel shortages, labor issues, and the like. It just happens to me right for me and what I want to accomplish. It is obviously not right for you.

BTW, you conveniently skipped the question of how much of your wealth you put into gold in 2001. I wonder why?