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November 18, 2011
· China economy good news for US growers
· Farmland has golden glitter for investors
· Tough row for young farmers starting out
· Nanny government may kill family farms
· Cuban countryside leads free market reforms
China
(Wire Services) FRESNO, CA – Amid American economic woes, China is fueling the success of a particular business sector by leading a strong export demand for U.S.-grown tree nuts, a trend that is likely to continue, according to a research study issued this week by Rabobank's Food & Agribusiness Research and Advisory group.
"The Chinese government is promoting an economy that is
favorable for many
"
Barber contends that there are inherent risks with
The report provides individual outlook profiles for almonds,
walnuts, pistachios, pecans and hazelnuts, including each nut's challenges and
opportunities. The study also touches on other global export markets and their
effect on the short-, medium- and long-term demand for
Media can obtain the full report, "U.S. Tree Nuts
Feeding the Growing Appetite in
Farmland has golden glitter for investors
(REUTERS) - Where there's muck, there's money, the old expression goes.
With 7 billion people now needing food on this planet, putting your money into soil and agriculture might be a long-term investment to consider. You'd certainly be in good company: In recent years, high-profile investors such as Jim Rogers and George Soros have made investments in farmland.
What makes farm property attractive? It has a finite supply and may become even scarcer with global warming, desertification and development. And with a rising population, more tillable land will be needed.
Moreover, it could be a way to diversify your portfolio away from financial markets wracked by global debt fears. Gold has been one alternative, but farmland could be a better long-term bet. Unlike precious metals, you can rent it out and use it to grow crops or feed livestock.
Although depressed somewhat by the economy's recent
weakness,
Recent spikes in commodity prices have given a new lift to
farm prices. Interest rates have also been relatively low, which tends to boost
most commodity prices. And when there are weather-linked problems in major
agricultural zones such as the American Midwest or
Buying individual parcels of prime agricultural land is difficult for most people. You have to know how productive that land has been, the cost per acre and the equivalent cost to rent it out. History offers a plethora of boom and bust cycles, and land owners need to be long-term investors to hang on through the dips.
For most investors, funds that invest in agricultural commodities and the farm business funds are a good way to get limited exposure and liquid enough to sell easily. They do not give a perfect correlation to land prices, but they do tend to shadow farmland prices. These exchange-traded funds (ETFs) can help you make targeted investments in agriculture and related industries, and with a relatively small investment.
The funds do not invest directly in farmland, but they offer a way to put some agri-dollars into diversified portfolios. Here are a few:
-- Market Vectors Agribusiness ETF. This exchange-traded fund invests in a basket of companies that derive at least 50 percent of their business from agriculture.
-- PowerShares DB Agriculture ETF. By investing in an index that reflects the performance of agricultural commodities -- and futures contracts that represent them -- you can diversify your portfolio with this fund. The farm economy, of course, directly tracks the prices of key commodities.
-- Global X Farming ETF.This fund follows the price and yield of a farming index. It is based on performance of a diverse list of global companies in farming and farm products.
There's always a solid reason to be cautious with these sector-oriented ETFs. They are subject to stock, interest-rate, commodity, country and now climate-change risk. If interest rates rise, commodities can move in the opposite direction. Land prices can easily crash without any warning and sometimes for reasons related more to finance and cash availability than crop prices.
You also need to be aware that the more investors who buy into agriculture, the greater likelihood that a price bubble will form. Midwestern cropland values soared some 20 percent in the fourth quarter of 2010 alone, reports the Kansas City Federal Reserve Bank (click http://www.frbkc.org/publications/research/mse/). Lofty returns tend to attract more investors hoping to reap similar performance. In a short period of time, these badly kept secrets feed speculative buying.
Even though farmland is becoming more valuable, you shouldn't confuse investing in it with owning a government bond. The only thing guaranteed in agriculture is uncertainty and volatility.
Tough row for young farmers starting out
(The
New York Times) – Emily Oakley, who had worked on an organic farm in
“He’d never met anybody coming in for a loan for an organic vegetable production,” Ms. Oakley said. “He thought, ‘These are young, naïve, romantic, idealistic kids who didn’t know what they’re getting themselves into.’ ”
Similar stories prompted the National Young Farmers’
Coalition, a new group that has grown out of the
“Everyone wants young farmers to succeed — we all know that,” said Lindsey Lusher Shute, who oversaw the survey. “But no one was addressing this big elephant in the room, which was capital and land access.”
Ms. Shute’s husband, Benjamin, runs Hearty Roots Community
Farm in the
The obstacles are formidable. At Quincy Farm in upstate
Tom Vilsack, the agriculture secretary, appears to have championed their cause. The 2008 Farm Bill included a program for beginning farmers and ranchers, and over the past year, the Agriculture Department has allotted $18 million to universities and extension programs to educate beginning farmers.
Speaking at the annual national convention of the F.F.A., or
Future Farmers of America, in
Mr. Vilsack has often noted that the average age of the American farmer is 57, and that that age is rising. He has said he hopes a younger generation will emerge, not only to replace retiring farmers, but also to reinvigorate rural areas. Last spring, his deputy, Kathleen A. Merrigan, toured colleges and cities to encourage young people to farm.
Six miles outside of
Although Mr. Book does not regret his decision to farm, he discourages others from entering the business. “It’s going to tear you down financially, even if you make no mistakes,” he says.
Data from the Agriculture Department support his warning — only 22 percent of beginning farmers turn a profit their first year. The National Young Farmers’ Coalition found that 73 percent of young farmers must work away from the farm; Mr. Book, a father of four, works 40 hours a week at a farm store.
When he looks out the back window of his small farmhouse, he
sees a 3,000-acre corporate farm and machinery worth four or five times as much
as his operation. “People are demanding cheap food, they’re demanding a lot of
it — corn for fuel, soy for diesel,” Mr. Book said. “It does have an impact on
us in the sense that we’ve seen land prices skyrocket in
From 2000 to 2010, the price of farmland doubled nationwide,
to $2,140 per acre from $1,090. For Mr. Deikis and
Ms. Fraver, buying property required creativity and
research. In 2007, they were tending their garden on
While they continued their search, they apprenticed on established farms, which they realized later was crucial for their success. Seventy-four percent of respondents to the National Young Farmers’ Coalition said that apprenticeships — unsanctioned in many states — are the most important programs for beginning farmers.
When Mr. Deikis and Ms. Fraver found a scenic spot for sale on the
“We are in a wonderful spot in rural
Ms. Oakley said young farmers rarely discussed that lack of community, adding that she had seen the isolation break up marriages. At their Three Springs Farm, she and her husband, both 34, grossed $60,000 by their third season — a reason to celebrate by most standards — but they wished they had more company.
“It was just the two of us, every job we did together,” Ms. Oakley said. “It’s intense. We would gladly trade a little competition for more community and collaboration.”
Nanny government may kill family farms
(denverpost.com) – On Colorado's farms and ranches, where sons and daughters work shoulder-to-shoulder with parents to bring cows and hogs to market, there is fear that new regulations could end a way of life.
Proposed revisions to U.S. Department of Labor child-labor laws for agriculture are lengthy and detailed. But farm advocates say many would kill the family farm and gut programs such as the Future Farmers of America and 4-H Club.
One new rule would allow kids under age 15 to work only on their parent's farm. Another would keep children under age 16 from driving most power equipment.
Nonagriculture workers under 18 would be banned from grain elevators, silos, livestock exchanges and auctions.
And the provisions also would stop children younger than 15 from working near "sexually mature" livestock, including bulls and boars or nursing cows and sows.
"In D.C., they really don't understand they are trying to stop what are common practices out here," said Shawn Martini, spokesman for the Colorado Farm Bureau.
Several farm groups successfully lobbied to extend the comment period to Dec. 1. The extension was granted "because of the interest expressed and the department's desire to obtain as much information about its proposals as possible," the Labor Department said last month.
Agricultural groups hope to sway the Labor Department to amend its proposals, Martini said.
"Most regulatory agencies do look at the comments and respond to them," he said.
The intent of the revisions is to beef up safety standards for children working in agriculture, farm advocates say.
Farming and ranching are among the most dangerous work in the world. It's especially dangerous for young workers, with the second- highest fatality rate for workers ages 15 to 24.
Officials say they just want to prevent a tragedy like the one that killed Cody Rigsby, who was 17 when he suffocated in a grain bin in May 2009.
In August, the grain company pleaded guilty to federal work-safety violations and agreed to pay the boy's family $500,000 to settle civil claims.
No farmer or rancher wants to see anyone get hurt on the job, said Terry Fankhauser, executive vice president of the Colorado Cattleman's Association. "But there are real concerns about how the rules are written," he said.
Those under 15 also could not help raise animals as part of a 4-H project or learn the newest techniques in animal husbandry as a member of the FFA, said Les Hardesty, a Weld County dairy farmer.
"Where and how are kids supposed to learn how to farm or ranch?" Hardesty said.
Susan Godsey — who works the
family farm in
"These rules just take the common sense out of the equation," Godsey said. "We have a pretty good idea of what our kids can do, and we are not going to let them get into a hazardous situation."
Cuban countryside leads free market reforms
(Associated
Press) SANTA ISABEL DE LAS LAJAS,
A private sandwich shop has opened in a town previously served only by a grim state-run cafeteria. A woman sells trinkets from a small spot of shade. A weathered farmer in dusty jeans has rigged up an ancient ice cream machine and is selling cones for 8 cents a pop.
Out of sight of
Visits to more than a dozen towns in the
Even in one-street hamlets like Yaguaramas, small businesses are buzzing while many residents, and most canines and livestock, lounge sleepily in the broiling midday sun.
The government says about 338,000 Cubans across the island
now have licenses to operate private businesses, including more than 4,500 in
Cienfuegos and 14,000 in Sancti Spiritus. While the
number has not changed significantly since April, it is still more than three
times the government's goal for the year. The businesses are the result of
Castro's plan to inject a measure of capitalism into
The new businesses are exceedingly modest. The income
generated is nowhere near enough to transform
"It's a way of having something that is all yours," said Alain Suarez, who along with his family has opened a professional looking "guarapera," or sugarcane juice stand, in Santa Isabel de Las Lajas, about 25 kilometers (16 miles) from the central city of Cienfuegos up a bumpy byway lined by tall fields of sugar cane.
The bright-faced 23-year-old points to a small pizza stand across the street from his establishment, and another that sells sandwiches. "All these businesses that have opened up recently have given the town new life."
While he speaks to a reporter, a dozen schoolchildren come over to buy drinks, and a huge press that Suarez's father concocted with an old American electric motor whirrs from a back room, sending sugarcane juice running down a metal trough and through a little window into a bucket near the front counter. The children pay 4 cents each for a cup, and go off happy.
As Suarez's little juice stand shows, free enterprise starts off small in a place where most residents make salaries of about $20 a month and where all private businesses, from humble grocery stores to electronics shops to giant factories, were taken over by the socialist state in the late 1960s.
The town was the birthplace of legendary singer Benny More
(pronounced mor-AY), who immortalized it in the 1955
song "Lajas, Mi Rincon Querido"
("Lajas, My
Other than a brief festival each year to honor More, Lajas rarely gets any tourists, and residents say few
receive remittances from relatives in
But
"Here, everything is reversed," Omar Everleny Perez, the lead economist at
Perez said Cuban farmers survived the lean years of the
1990s that followed the collapse of the
"There are bank accounts worth 4 or 5 million Cuban pesos ($160,000 to $200,000) in the hands of farmers," he said. Perez said 13 percent of Cubans hold 90 percent of the money in all of the island's private bank accounts. "It is very concentrated, and much of it belongs to the farmers," he said.
Perez has been unusually outspoken in his criticism of the reforms so far, arguing in opinion pieces published by the Roman Catholic Church and elsewhere that much more needs to be done to pull educated Cuban professionals into the private sector, allow bank credits to would-be entrepreneurs and establish a wholesale market to supply the new businesses.
But he said the changes are actually going better in the countryside.
He pointed to a program started in 2008 that has turned over more than 1.3 million hectares (3.2 million acres) of fallow government land to small-time farmers. While it has been beset by complaints of inefficiency, the program has put cash in the pockets of many rural families and some of it has gone into patronizing or funding new private businesses.
Salvador Parra Maya, a 46-year-old musician in Rodas, a town of about 12,000 in
"The town has improved," Maya said. "There's more to buy, the quality of life is better. People are satisfied."
In Cienfuegos itself, a relative metropolis of about 170,000 along the southern Majagua peninsula, the economic reforms have created a boom in private restaurants, or "paladares," said Santiago Gonzalez, an engineer who opened a rock'n' roll-themed eatery called "El Lobo" (The Wolf) in the center of the city.
The restaurant features posters of once-banned 1970s rock groups and a painting of KISS frontman Paul Stanley, with whom Gonzalez shares an eerie resemblance. Despite the somewhat shabby interior, he says his place is always full, with a mix of tourists and Cubans, and that he can clear up to 3,000 pesos ($140) a month after taxes, about seven times what he earned as an engineer.
Gonzalez said the number of paladares in the city had soared from just two before the reforms to between 40 and 50 today.
"From last year to this, you can just see the city changing," Gonzalez said. "It is a city that is prospering."
Perez said most of the reforms until now have been designed
to alleviate the economic hardship of citizens, and they have been adopted
first because they don't cost the state anything. But he cautioned that the
pace of change must pick up significantly to pull
In addition to bank credits and a wholesale market, Perez has been advocating the creation of mid-sized cooperative companies that can do business directly with the state - making boots for workers, or preparing lunches, or selling transportation services - something that Cuban leaders have promised but not yet implemented.
On Thursday,
"We are only at the beginning of the process," he said. "The law allowing private enterprise ... is not sufficient to boost the economy. Selling sandwiches isn't going to make the economy grow."
But in Lajas and other towns, the reforms have been enough to change people's attitudes, and keep many young people from going away.
"Fewer people are leaving town because they are finding something to do here," said Arelis Contreras, the mother of two young adults who says she used to worry that her children would leave rather than make a go of it in a town that offered them little work.
"Now, they won't have to go to
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