why i'm holding onto nufarm, page-12

yeah cheers yc, gotta say i do broadly agree with you, high input farming is too risky, production cycles are generally long and ag markets (not to mention the weather) just change too quickly.

in my experience though profitable business models can still borrow at a reasonable price (i consider anything less than 10% as cheap credit), whatever the industry.

also, generally speaking i can't see land prices crashing. now this might just come down to regional differences, but i look around and can see plenty of land for sale but at a price. the vendors are the farmers that would sooner lease their properties than sell at a low price.

ok, so maybe farmers are broke and mortgagees will sell from under them? i doubt it, the banks have no interest in destroying land values, they are definitely less trigger happy now than they were in the 80s. and at the end of the day 90%+(?) of farmers would have 50%+ equity in their property, the banks funds are very well secured.

yeah land prices can fall, but its usually the result of a structural change, i.e. abolition of the floor price in wool.

thats my experience in grain growing, but yes the economics of dairy farming have always frightened me. they have always seemed to operate highly geared and (not counting the recent boom) achieve quite slim margins, very risky business.

whats this got to do with nuf? sub prime or not, it isn't good, farmers will either go broke en masse or at the very least back right off inputs, neither are good i would have thought.