farm land, page-12

Oh I'm deadly serious Alpha. Not only am I serious but it is the business model I have adapted and it appears to be paying good dividends.

Rather than buying the neighbours farm last year, a farmer could have bought 2 years worth of fertilizer, a whole bunch of fertilizer stocks and 2-3 years worth of some key herbicide/fungicides. All of the sudden he has become one of the cheaper producers of grain on a per tonne basis than the supposed maxed out larger farmers paying top dollar for fertilizer and still with no hedge in sight for their cost base in the fertilizer. The game has changed ... this boom is about managing the cost base and the discounts are coming from buying stuff before it hyperinflates. Its a bull market for the input suppliers so why are they going to discount for larger orders.

This is dryland Alpha ... the corporates are going to struggle making it work unless they opt for low input cropping systems.

The other risk to buying land is having it taken away from you should this gig get out of control - nationalisation. There's more than one way to skin this boom ;)