I'd be interested to hear how you think they have diversified...

I'd be interested to hear how you think they have diversified their earnings base to minimise the risk of drought without moving leverage out of the agricultural sector completely. In which case they are not really filling the needs of investors chasing agricultural equities.

Earnings are obviously disappointing or else the SP would be appreciating, bearing in mind the agricultural boom has well and truly begun. Time for these companies to be vertically integrating back towards the input production base. Retailing is a fickle and seasonal business adventure and even moreso in agriculture. I

Incitec Pivot is a classic example of the benefits of vertically integrating back to the production base when they acquired Duchess Hill from BHP a year or so back. This is the best way to lock in earnings potential and diversify away from drought risk as the inputs can be offloaded in export markets if domestic demand is crimped by seasonal constraints.

So I'm all ears ...