The entire sugar industry's processing sector has been snapped up by foreigners who have re-invigorated the industry following deregulation and years of underinvestment under the Single desk vestage. Farmers and new producers can now confidently and profitably grow sugar and more importantly to farmers who are thinking of exiting, leave the industry reaping the fruits of many years of hard work for little reward. Land prices have benefited from this.
It is now happening in the grains industry. Under the old Single Desk days with AWB pre 2008, underinvestment in all aspects of the supply chain was a common theme. Since deregulation farmer per tonne returns especially in the West have consistently been around $25-35/t above East Coast growers, increasing land values (or more likely stopping them falling). Pretty soon the WA farmer co-operative CBH will be aggressively taken over as well, monetising current $2 shares to a true market value, likely around $200-$400k each. Farmers exiting the industry at the moment leave that equity on the table.
Plenty of examples out there if your eyes are open ...
GNC Price at posting:
$12.48 Sentiment: LT Buy Disclosure: Not Held
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