dormant monsoon has little effect on fert!, page-7

You can belive that PinB. I don't, not in the medium to longer term ...

There are other land uses that rely on a much lower input (ie low fertilizer/ low credit) paradigm. For example, meat animals on pastures. In those systems you essentially don't need to apply nitrogen (assuming you have a good base of legumes pasture species) and requirements for P and K are very low since the only phosphate removed is in the bones of the animals and K in the salts levels of animals.

As an interest, the carbon sink market permanently removes land from grain production. In Australia alone I have calculated around 10,000 hectares has been planted to carbon sinks this year. Although I don't see the logic in locking good land away that appears to be what the governments are intent on promoting through the ETS and cap and trade systems.

TC I sadly think markets will wait till the grain supply shortages are evident before they will move. Can't understand why wheat prices continue to tank along with corn because I believe the mainstream media have it wrong on the size of this year's harvest. You only have to look at how fertilizer useage has plummetted to appreciate there will be a significant percentage of crops out there that have been underfertilized and hence will underyield. A shame we have to hit a brick wall before the market signals are sent out loud and clear. A two year boom in grain prices has largely been a curse since it ratcheted the cost base and lending requirements and now leaves many farmers more exposed to the risks in debt markets and production in general. Anyone that has missed a year or two of the high prices through drought or other extremes is particularly vulnerable.

Its pretty simple for my mind, watch grain prices for sustainable direction on where prices are heading. I don't think the upturn will be V shaped and markets will provide plenty of warning. Farmers are already beaten down before you add rising prices of costs back into the equation.

The x factor to this story is you do undoubtably have some investors large and small trying to pick the turnaround. Are they right? They could be but it won't play out as part 1 did. M&A activity could appear unexpectantly and of course that would be welcome if you were a shareholder.

One point that needs to be highlighted is that it is now clear that the profitability of farmers is less aligned to the world is short of food story ...