Innovators to invade London
With $2.50 corn and 60-cent pigs, the Innovative Farmers Association of Ontario's 1999 conference theme couldn't have been closer to the mark: "Doing More with Less!"Port Elgin dairyman Bob McKinnon, chairman of the Feb. 16-17 IFAO conference at the London Convention Centre, says organizers wanted to "bring people information that we as a group of farmers were looking for," such as marketing, planter setup, manure spreading contracts and common sense precision agriculture.
IFAO is a network of Ontario producers who exchange ideas, and networking is what their conferences are all about. McKinnon says five breakout sessions over the two days will allow farmers to get specific questions answered: "The whole meeting's for the farmers. You can really get farmers talking to farmers."
At evening roundtable discussions on field record keeping, narrow rows, foliar feeding, no-till, on-farm biotech, herbicide rates and manure management, farmers can share information on what they are doing on the farm, McKinnon says.
First-day highlights:
* Fertilizer strategies. Peter Johnson, Middlesex OMAFRA,
discusses
liquid, dry and banding, where to place it and how much.
* Proper planter set-up. Bob Nielsen, Purdue University,
discusses
fine-tuning the planter to improve the bottom line.
* Marketing strategies. Jerry Gulke, Strategic Marketing Service,
who
farms 2,000 acres in Illinois and is marketing columnist for Top
Producer
magazine, looks at making the most from the markets.
Second-day highlights:
* Common sense precision agriculture. Wayne Currah, Trillium
Agronomics.
* Herbicide-tolerant crops. Mike Owen, Iowa State University.
* Land swapping and manure exchange agreements. Peter Pickford,
lawyer,
and Jim Bloxsidge, farmer.
IFAO conference registration fee before Jan. 15, including meals,
is $125
for members, $175 for non-members, and $75 for students. Fees
jump $25
after Jan. 15. With a $100 membership in IFAO, new members can
save $50 on
the conference.
For more information: (519) 769-2443; www.ifao.com
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AGRI-BUSINESS
Nuts & bolts
Meet Aventis
Hot on the heels of Cargill's purchase of Continental Grain's
grain
operations came the blockbuster announcement that Hoechst AG of
Germany and
Rhône-Poulenc SA of France were forming the world's largest life
sciences
company. Pending government approvals, the new US$36-billion
company,
Aventis, would oust Novartis for top spot in the pharmaceutical
and
agrochemical field, and would be in the same league as the failed
merger
attempt between Monsanto and American Home Products. Ontario
croppers know
Hoechst through its agricultural division AgrEvo, which makes
Liberty
herbicide and the Liberty Link corn gene. The super company's
merged
agricultural division, Aventis CropScience, would sell 15 per
cent of the
world's herbicides.
Hay help
The bureaucrats running Ontario crop insurance worked at
lightning speed
to get $4.6 million in drought claims to 1,057 drought-hit hay
growers in
Grey, Bruce, Renfrew, Huron and Elgin counties. Affected farmers
spoke
directly with Guelph-based AgriCorp, which says it's the fastest
hay
payment in a decade. CEO Tom Schmidt says he is continuing to
work on a
forage plan that reflects local conditions better.
Case cutbacks
Farm equipment companies are throttling back production, with
North
American sales expected to slump 15 to 20 per cent this year.
Case IH,
which recently launched the new MX Magnum row crop tractors, has
cut
tractor production by 15 per cent, eliminating contract workers,
and laying
off factory workers. Third-quarter profits fell 19 per cent to
US$63
million.
Sales hit brakes
The sheen is off surging North American farm equipment sales, but
smaller
tractors continue to hold their own in Canada. According to the
Canadian
International Farm Equipment Institute, two-wheel-drive tractor
sales were
up 4.6 per cent as of November versus the same period in 1997.
Large 4WD
tractor sales were off 54 per cent, however, and combine sales
dropped by
37 per cent.
Tractor trinkets
Can't afford a new tractor? How about a John Deere piggy bank
tractor to
save up for the real thing? America's Favorites offers a line of
John Deere
cookie jar, bank, and salt and pepper shaker collectibles. Other
well-known
brands include Budweiser, Texaco and Chevrolet. US$10-US$50.
1-800-NEAR-YOU (1-800-632-7968.)
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Asian bust symptom of investment boom
The past year was a period of financial excess.Early in 1998 we saw asset inflation as stock indices commonly set new highs almost every day. In August, commodity prices went through a meltdown as economies around the world fell like dominoes.
As we finish the year, a stock market recovery is underway, helped by government spending, aggressive interest rate cuts, IMF funding of problem economies, and banking reforms undertaken in Japan. While the popular averages have turned in a respectable year as of this mid-December writing, the average issue in New York is down, and most stocks are off more than the average stock. For example, the Dow Jones Industrial Average (30 blue chip companies) is up about 12 per cent; in contrast, the average NYSE (New York Stock Exchange) average has lost about 8.2 per cent. The results of our Agri-Fund Index show the same mixed results seen in the larger market of stocks. (Last February, Farm & Country's editors asked me to select companies for the Index not as an investment recommendation but as a bell-weather for how agri-business in general was performing worldwide.) The machinery group was hit hardest. Agco, for example, was at one point worth just 20 per cent of its Jan.1, 1998 value. The best performer in this group is the short line company, Gehl. The biotech arena has been a hot sector. Monsanto's purchase of Dekalb made Dekalb the best investment of our ag group, soaring to two and a half times its Jan. 1998 price. Mycogen followed a similar tale, bought out at 50 per cent higher than its starting price. The drug sector has seen some great success stories, too. Having a pipeline full of new drugs as well as a roster of existing pharmaceuticals helps to keep sales growing year and year out. Pfizer, Merck and Pharmacia & Upjohn show the best returns since the starting date. Stocks in the food chains show a wide variance in returns. Thorn Apple Valley has dropped to less than 20 per cent of its starting value, whereas Weston and IBP have both gained more than 30 per cent. Each period of business expansion is driven by something that is carried to excess. In the 1970s, investment and inflation in the energy sector were the source of real economic growth. Eventually the energy-related capital stock became overbuilt, earnings collapsed, and the economy fell into recession. In the 1980s, the same dynamic fell upon the real estate and services sectors. Once again, investment was the driver and eventually overshot. The business expansion of the 1990s more than ever has been driven by investment. In my opinion, investment has been growing two to six times as fast as demand, and pricing has to be the adjustment factor. Industrial production rose 25 per cent over the past five years, yet capacity utilization has been flat. Now demand is weakening. The weakness in Asia can be viewed simply as a symptom of the huge investment boom. n Kevin Simpson, CFA, is a financial consultant with Merrill Lynch Canada, Stratford (1-888-417-4459). This information was obtained from sources believed to be reliable; accuracy or completeness cannnot be vouched for. Views expressed are those of the author and not necessarily those of Marrill Lynch Canada
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