Is now the right time to get into farming?

Pa ElGrande

Opportunities

Rogers thinks the best opportunities in commodities lie not with metals. "Agricultural commodities are the most attractive," he says. "Sugar is 80% below its all-time high. Maize is 60% below its all-time high - so is cotton. Adjusted for inflation, some of these commodities are 80%, 90% below their all-time highs.

"The hectares devoted to wheat have been declining for 30 years. The world has consumed more food than it has produced for the past five years, and that's the first time in recorded history that that's happened. We've had no worldwide drought for several years. I don't know if we'll have one again, but I know what happened in the 1960s and 1970s when we had droughts with low stocks of nutrition. The price of sugar went up 47-fold in an eight-year period."

Best is yet to come, says superbull
http://business.guardian.co.uk/story/0,,1790965,00.html

The majority of farmers are facing retirement in Ireland.
The world is consuming more than its producing.
Is there a way to build a farming model that does not need subsidy?

Victor

No.

Pa ElGrande wrote:

The majority of farmers are facing retirement in Ireland.

Yes, they are relatively inefficient

The world is consuming more than its producing.

Not quite. We are producing less than we used to. That previous excess was typically wasted.

Is there a way to build a farming model that does not need subsidy?

Leave people with natural advanatges do it. Cheap labour and plentiful sunshine with adequate rain, means cheap crops. Add good seed and education to that means you are on a winner.

allnamesgone

Yes, if you want a sure way of losing money or you have a few million spare that you can put into an asset. The increasing value of land is nothing at all to do with the farming potential of the land but a reflection of the asset bubble that is enveloping us all. The merits of this may be argued but it is hard to argue with the figures projecting much reduced farmers.

Pa ElGrande

This year’s world grain harvest is projected to fall short of consumption by 61 million tons, marking the sixth time in the last seven years that production has failed to satisfy demand. As a result of these shortfalls, world carryover stocks at the end of this crop year are projected to drop to 57 days of consumption, the shortest buffer since the 56-day-low in 1972 that triggered a doubling of grain prices.

World carryover stocks of grain, the amount in the bin when the next harvest begins, are the most basic measure of food security. Whenever stocks drop below 60 days of consumption, prices begin to rise. It thus came as no surprise when the U.S. Department of Agriculture (USDA) projected in its June 9 world crop report that this year’s wheat prices will be up by 14 percent and corn prices up by 22 percent over last year’s.

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The troubling constraints on grain production growth, such as spreading water shortages and rising temperatures, are making it difficult for farmers to keep up with the record growth in demand. As a result the world grain market may become a seller’s market, one where higher grain prices, like high oil prices, are an integral part of the economic landscape.


World Grain Stocks Fall to 57 Days of Consumption: Grain Prices Starting to Rise
http://www.energybulletin.net/17261.html

No doubt this will eventually feed into the cost of living.

ronbyrne2005

Irish farming wont always be so much dearer than cheaper countries,as the cheaper countries economies develop and as world demand for food rises and cost of energy/transport increases locally produced high quality value added produce will command an economic return.

Victor

ronbyrne2005 wrote:

locally produced high quality value added produce

This is invariably a function of processing, not farming.

allnamesgone

I would disagree with the assumption underlining the last answer ie
value added processing equates high quality food.
Surely the fundamentals of good quality food is that which has undergone minimum processing.

floor_pie

I was reading an article in last weeks Farmer's Journal talking about goat farming.The initial outlay was reasonably low for milking parlour,cheese making equipment and 100 goats.Think it worked out as 800 or so per goat including all the equipment. Farmer then sells goat cheese for 12 euro per kilo.
The farmer interviewed was very positive and said there are plenty of oportunities for like minded young farmers in Ireland.
There is no milk quota on Goats and they an be kept in relatively small acreage.Which was the reason he got into goat farming after talking to Teagasc in the 90's.