next boom sector, page-2

Clarkkent you out there? A negative for the supermarkets. I know not everyone has a backyard but those that do will be ripping out the lawn and planting vegies. I really think the supermarkets will not have an answer for the current dilemna our food production system is faced with.

No farmers will sign offtake contracts as flexibility to switch to what ever crop you like is paramount to profitability in this bull food market. One of my good mates in Bundaberg has halved his spud crop and has planted corn and soybeans to capitalise on the grains boom. Doesn't have to stuff around with contracts with little or no pricing transparency and he now has international futures markets to be able to manage price risk with. This trend will continue. We will see in time whether demand for vegetables is inelastic or not. I suggest people will baulk at high vegie prices and look to grow their own where they can.