Growing animals on pasture based systems require little if any grain if you are not overstocked. They eat grass and excrete any phosphate and potash they digest with the grasses back onto the soil for reuse by the pasture. Many farmers now using perennial pastures which are much longer seasoned and allow deeper water tables to be accessed. Check out the following website: www.evergreen.com.au
Can't see the GFC media coervage going away. If anything there is a lot of evidence to suggest it will return with a vengeance. You had a Minister from Labor's ranks yesterday warning of a second credit shock possible in the future. Rising interest rates are certainly suggesting something despite all the stimulus money that is supposed to be out there relieving tight credit markets. And inflation yet to tack onto this 'recovery' story at some stage.
I can see a shortage of grains concurrently arriving with an unwillingness by farmers or their lenders to chase those prices until this time around, they are 200% sure that high prices are not going away. And at the end of the day you need to be able to borrow the money you need to buy fertilizer in the high input systems. This is done before you are even remotely sure of production. Grains will lead. They have to. Nobody is going to pay more to grow grain than they can make. There's no easy credit left in the world to play that game. Here's an interesting piece I posted this morning on the banks thread ...
---------------------------------------------------------- FDIC Sees Ag Banks As The Next Big Crisis Aug 18, 2009 10:32 AM, By Dave Kohl
I bet this headline will catch the attention of readers from the beltway of Washington, D.C. to the depths of rural America. This is the word on the street circulating in conversations with lenders and producers in agriculture and rural America on my recent Road Warrior travels. While these rumors may be false, perception becomes reality in the boardrooms and loan committees of our lending institutions, which will ripple to producers.
Yes, banks, farm credit and other financial institutions are tightening agricultural credit extension. Credit is still available, but information and collateral requirements from borrowers are increasing and being scrutinized.
For the most part, lending examinations of institutions loaning to agriculture are intensifying, particularly as bank failures in rural areas increase. The fallout from one institution with large ag credits under the eye of examiners was the shot heard around the country in lending circles.
Today, much of the U.S. farm debt is in the hands of the 300,000 commercial producers that generate 75-80% of the revenue. The financial difficulty faced both by lenders and producers is not the result of financing based upon inflated land prices. As revenues have decreased and input costs have risen, margins have been squeezed.
Financial leverage in the protein and livestock sector is the battlefront to watch this fall and winter. This could eventually impact the crop sector, which then could become the next big crisis!
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