Business Plan Game Change

[charliep]

I found this article in AgWeb very interesting. Talking about the US but I suspect very close to the issues that you need to follow in western Canada.

[URL="http://www.agweb.com/topproducer/article/business_plan_game_change/?smartid=ZZZZZZLZ11Z2Z21ZZZZZZZZZZZ&spMailingID=41 300293&spUserID=MzYxMzYzNzMwMQS2&spJobID=184413694 &spReportId=MTg0NDEzNjk0S0#comments"]Business Plan[/URL]

[cottonpicken]

Dont agree with any of that man;s assumptions.

[BTO_farmall]

pluss zeroo

[errolanderson]

Risk management will be very important in
farming and cattle feeding industries
ahead. Growers have to realize that ag is
not immune to problems in global financial
markets.

This is what this guy is saying . . . .

[cottonpicken]

I'll just stick to the rising rates point.

People need to firmly understand what would happen
if interest rates rise.

Every point raise would cost u.s gdp somewhere in
the neighbour hood of 150 billion dollars.

If japan raised rates 2-3 points,100% of central
government tax revenues would goto interest
payments.

Every bank would become insolvent.

Many housholds would become insolvent.

Many companies would become insolvent.

Government tax revenues would plummet.

Unemployment would go past 50%.

Social security,medicare and education departmets
would disappear.

Public and private pension plans would implode.

The storm feeds on itself.

Anyone think a politician is going to take this path??

Or are they more liable to keep the money flowing?

[charliep]

Just curious what points in the original document you disagree with. As Errol indicated, the article talked about risk factors for a farm business. The list of these factors in your individual business and strategic plan might be different. They are all things that most businesses can plan around and either accept, mitigate or transfer. You seem to talk about Armagadon/total collapse of the financial system with thought agriculture will be protected.

In spite of all the doom and gloom, we have the Dow Jones at 2008 levels. Still lots of problems ahead but .... From my perspective, the question comes down to steps in the short term to deal with risk and how you position your business for the medium/long term to capture opportunities/protect from a disaster.

[charliep]

The points in the article realizing a US publications. Just the headlines.

Assume declining federal ag support

Ethanol industry loses momentum

Global demand will shift

Corn acres might increase

Land values might tumble

Rising meat exports create risk

Dairy has tough financial row to hoe

Current net farm income difficult to sustain

[errolanderson]

cotton . . . the money flowing plan is
getting long in-the-tooth and not
working very well. It really doesn't
matter what a politician thinks anymore.

The U.S. has already crashed into a
brick wall and now trying to pick-up the
remains. QE3 is failing (IMO) and in
fact is likely making recovery potential
far longer than if governments would get
their spending in check and standard of
living down.

That's why the Fed is getting pressure
to cut their losses soon. I fear that
Bernanke has created a serious money-
printing bubble in these markets and is
anything fixed in the economy?? or is
the can just kicked down the road??

This stock market rally in the Dow is as
artificial as it gets. Now the S&P
longerterm chart is showing a clear
triple top. The TSX is now facing
reality (IMO) with the commodity
washout.

Do agree with you that there is no hope
in hell of a rise in interest rates for
a very long time. In fact,rates may drop
further contrary to a lot of central
banker talk.

[cottonpicken]

Risk management and doing smart things with your business is of course very
important,to the point of being to obvious to mention.

My opinion is that as the global economic situation plays out the worlds capital will
struggle to find yield and it will continue to flow into productive things.

Stockmarkets will even rise,although nominally.

Yields in us treasuries will go negative.

Currencies will devalue.

Anybody ever here of the 5cent candy bar war?

http://bobbea.com/treasure/vancouver/chocolatewar/chocolatewar.html

So whats a candy bar now and why is it different than back then?

There are many things that could change this scenario,like bank bail ins.

[cottonpicken]

And if you believe i'm wrong,the lucrative counter
trade would be to go out and buy some yen.