Oil's doom and gloom spreads

[Lex]

Just got a phone call from fert dealer urging me to buy saying fert has already gone up $40 and could go higher.

Tell you what. I'm thinking pulses and summer fallow. Not saying that's what I'll do. Just thinking. Oil down....copper down....housing? Fert?

[canolacrazy]

fert dealers always show up this time of year to try and create panic. remember 2008 when viterra tried to convince everyone to buy $1200 nitrogen to bail them out. price went down and they wrote off millions because they paid the high price and couldn't find buyers.
as for cattle, i agree, still slightly bullish because only the young guys who love it will get in. not many want to be tied down 365/24 hours anymore. however when there's a downdraft in commmodities overall, i'd still be buying livestock price insurance to hedge my bets. just sayin'

[mbratrud]

I think everyone needs to take a deep breath, not going to change anything anyway. Need to have a look at things in 12 months. Is oil simply over shooting? Is Opec stupid enough to squander away there profits for a long time? Cheap commodities are actually going to stimulate economies in most of the world. I think in the long run getting the world addicted to cheap commodities will be a good thing.

If you are a speculator then maybe will get burned. If you bought your house to live in, and your land to produce off of then there is nothing to be concerned about.

[tweety]

Canolacrazy, how did a company like viterra "write off" millions? what does that even mean?

[ALLFARMER]

Exactly mbratrud bang on comment


Tweety do you not keep a balance sheet?

[bucket]

Mbratrud

You mean slow and steady might win the race. Hope so cause I am getting slower every day. Both mentally and physically.

[errolanderson]

new guy . . . My point is cattle are not immune to global events. Rapid recent changes in copper, crude oil and the bond market point to a global slowdown.

The strong US dollar and weak Euro is now pushing Irish beef into the US. Crazy developments beyond our control.

How this plays out is unknown. But demand always trumps supply in any commodity market

[seabass]

Errol what would be "a best guess" of how long this might last? As long as the up swing since 08?
Its hard to image it staying down for too long. The reason I say this is the other day there was an auction sale that brought over 3500 an acre for canola/wheat ground. Hard for me to pencil that out unless I live to 100. They must have better financial advisors than me.

[kato]

Upswing in 08? As a cattle producer, i can say that other than immediately post BSE bombshell, 2009 was one of the worst years we ever had. For us, until just recently, there was no real good year, no upswing. Cattle are not sky high. They are just finally catching up to what they would reasonably expected to be after 11 years of little progress. We stood on the sidelines while the good times rolled right on by. It's our time to pay the bills now.

We expect some volatility in this crazy environment, and I think we will muddle through. I also see that the local auction marts are quoting feeders higher than last week.

[canolacrazy]

write off means write down the value of the asset on the balance sheet. it then turns into income at a lower price. but a material loss has to be reported to shareholders.
i agree the oil market may be overshooting, but commodity markets are what they are...volatile. the trick for us farmers is to try and navigate our way through to make a buck. with quality product to sell, there's still a dollar to be made, and the drop in oil is also helping my expense line as well. this year, we'll see.