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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (33830)	11/23/2003 5:03:39 PM
From: nspolar	Read Replies (1) \| Respond to of 36161

Joan, you sound like an old style farmer (a compliment). The unfortunate situation of today is that many do borrow money today, to cover the costs incurred for forward production. Then when that production occurs, they have to sell rather quickly. If in the interim a hiccup occurs they are in trouble. In regard to the borrowing forward, many also have greater costs than they would if they didn't have to (borrow), as they must also buy crop insurance, hail insurance, etc. I don't know the % of farmers that have to do this, but I think it may be higher than what you or I would initially gestimate. When I was a farm lad, I think this situation (borrowing forward) was rare. During that period very few farmers went broke, they got by. Maybe my knowledge of that era was incorrect, due to my young ignorance, and this was not true. On a related subject what do you think the value of farm land might do, over the say next 5 years? I am asking for good reason, as I am perhaps interested in purchasing a farm. But I must admit the whole area at present is like looking into a dark hole (for me anyway). Some say we are in a commodities boom. Nearly all of us seem to be longterm bearish, re the general financial markets. If the latter gets hit, and hit hard, it does not make sense to me that all commodities will do well, in particular those that are strongly demand driven. Another issue I suppose is interest rates.