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Another agriculture play. Fertilizer. Easily supplies North America. Agriculture is being supported in the ridiculous George Bush plan to raise corn for bio-fuels, so farmers need alot of fertilizer to grow the corn- government pays them alot for growing the corn.
This post is more than 60 days old. Replying to it might be confusing for other members reading the discussion.
By all means, keep the ball rolling and post a new opinion.
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shlomi
Feb 11 at 3:02 ET
interesting move ... I've added them to my watch list.
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verushka1
Feb 11 at 3:13 ET
Hi Shlomi,
The idiot US govt. is funding the stupidest plan to make the US fuel self sufficient. They are paying the farmers to grow corn and for every gallon of ethanol that is produced the govt. subsidise it at the rate of $5.40. Then the ethanol company can charge market rate.
So now farming is huge huge huge in the US. Farmland is going out of sight in price. THere is also the rise of the CHinese middle class and the Indian middle class. As they become wealthier they are eating more protein. That necessitates feed the animals corn, soy beans, etc., only grown with fertilizers. Also, the US the the wheat basket
for the world.
As these people are now eating less rice and more McDonald's and bread, more wheat is needed.
Today wheat reached its highest world price ever. Being that people have to eat, I don't really see a slow down in the agriculture area and need for fertilizers and GM seeds in the near future.
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arawak
Feb 13 at 10:34 ET
I think sentiment is shifting as far as biofuels go. The EU released a damning report saying biofuels should not be pursued. It sort of makes sense. Capturing sunlight via a plant and then converting that plant to a combustible fuel that gets put into a car... well.. there are easily a few dozen steps in that process with loss accruing at each one. It'll only work if the gov't subsidizes the shit out of it.. which with a broke gov't hopefully won't happen.
Personally, if you are going to go for a long-term play like this, I would recommend a uranium bid. I bought into sxrzf.pk.. uranium is the only clean non-carbon-emitting source of energy there is. the only source of energy of SCALE. solar and wind are still, unfortunately, something the hippies espouse when they sit around smoking their peace pipes filled with marijuana. I believe solar has a future but it's still a decade away before we see a 50 gigawatt solar install popping up.
It's the dawn of a new nuclear age. And even though uranium prices are high right now and forecasted to come down in 09, uranium supplies are susceptible to interruption. mines flood. a lot of the mines are in dodgy locations in africa, Kazakhstan, and so on. It's a safe multi-year play.
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verushka1
Feb 14 at 9:29 ET
Dear Arawak,
I agree with you. Solar, wind,nuclear, water power would be a much more sensible approach to energy. George Bush has a totally misguided bio-fuel program but hey, if the stupid US gov''t is pumping huge dollars into their ill conceived program and they are paying the farmers to grow corn, why not benefit?
The farmers need fertilizer. MOS and POT have the fertilizer- to me there is alot of upside in the ag play.
Further, as I have already mentioned in the BRIC countries the people are getting richer by the day and they will now eat three meals a day and they want protein and wheat. All this means more fertilizer to feed the world.
Wheat just reached its highest price ever. It is big big business. They need fertilizer to grow their crops.
I agree that nuclear is a better way to go but if we have a President who can't even pronounce the word, it doesn't look like we will have that kind of program, at least not till we have a new President.
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guliamo
Feb 17 at 1:48 ET
I read somewhere that the amount of fertilizer needed to grow corn or wheat in the mid west has gone up 12 fold in the past 20 years. There is a serious risk of erosion and poisoning water sources. It sounds safe to say that this will continue to be a growing business, but I'm not sure this is the best way to benefit from an AG play... i got burnt on CPO after stock prices crashed.. these stocks have serious P/E's to live up to... I like raw materials better.