Based on Monday morning's earnings report and some follow-up information from my analyst team (ahem - readers), we've come to the conclusion that Intrepid Potash (IPI) prices their fertilizer 70% by contract, 30% spot in each quarter. For the contracted portion, if last quarter is a representative sample, they priced the contracted portion with a 4 month lag. Assuming April 1 'contract' pricing came in December 2007-January 2008, we should begin to see meaningful upside in Q2. Q3 (starting July 1) should price in March 2008 and the full effects of the rampant bull in potash pricing be reflected by then. A risk of course is if potash pricing falls in the back half of the year, something I would find as a very small probability:
[Mar 27: Canpotex Potash Contracts Secured with India @ $625][Apr 2: Potash Makers Already Talking $750, up from $625][Apr 16: Chinese Agree to $576 Price Point for Potash][Apr 23: Potash Hits $1000 on Spot Market]
With that said, I still want to hear myself tonight, but going with my analyst team, I'm creating a starter stake in Intrepid Potash here in the $48s, with a 400 share buy or $19,600. Due to market conditions and potential for commodity pullback, plus the need to listen to the conference call, I'm starting small - this is a 1.6% stake. I would like to add to this position in the low to mid $40s on a sector pullback, or if the name starts to run on me, I'll add as well.
I don't expect this to take off tomorrow, but if this pricing mechanism outlined above is accurate, the current 2008 estimate of $2.24 EPS should be surpassed by Dec 31, 08; but this will be a very backloaded year.With that said, coal is a 2009/2010 story and that has not stopped the stocks from creating massive moves in 6 weeks. So we won't know when the market will recognize inefficiencies - you just have to identify them and be ready to latch on once the whale starts swimming.
This new information makes me far more bullish on this name than I was 24 hours ago; again every $100 increase in potash = 70 cents EPS to Intrepid according to their filing.
We estimate that every $10 per ton increase in the price of potash will have a pro forma annual earnings impact of approximately $0.07 per share.
According to their filing this is their current pricing scheme
Q1 Average: $390 (Jan $357, Feb $397, Mar $417)
Q2 Looks like this - Apr $503, May $532, Jun $582
As an added bonus, it appears the vast majority of their sales are domestic in nature; with China short-changed in their potash this year, I can see certain Asian friends knocking on their door in the coming year. Again... just about everything is about China nowadays - but while they can slowdown their orders of steel, concrete, metals - keeping their people warm (coal) or feeding them (fertilizer) is going to be a very difficult thing to stop doing; so even if China does implode under its own supersonic growth rate, feeding and energy needs should not suffer. (Note that does not mean American stockholders of companies in these areas won't panic-sell on first hint of China slowdown, but that's just American stockholders being American stockholders - very little to do with fundamentals)
Thursday, June 5, 2008
Deere Acquires Plastro to Become Third Largest Worldwide in Agricultural Irrigation
MOLINE, Ill., June 5 /PRNewswire-FirstCall/ -- Deere & Company said today that it has completed the acquisition of Plastro Irrigation Systems, Ltd., headquartered in Israel, to add significant momentum to the growth of John Deere Water Technologies. Terms of the transaction were not disclosed.
Deere will combine Plastro with its current John Deere Water Technologies operations and T-Systems International, which Deere announced it had acquired in late May. The joint operations establish John Deere as the third largest agricultural irrigation company in the world.
"This sale demonstrates that we have been on the right course in our continuing effort to create value as a company," said Yonatan Bassi, chairman of Plastro Irrigation.
Michael McGrady, president of John Deere Water Technologies, said, "Precision irrigation will help the world meet its demand for increased productivity from agriculture. The world's population growth, demand for improved nutrition globally, and increased interest in renewable fuels all require much more precision in the management of the world's fresh water and arable land."
John Deere Water Technologies, San Marcos, California, is a manufacturer of high performance plastic micro and drip irrigation products for the agricultural, nursery, landscape, and greenhouse markets and was formed in June of 2006 when Deere & Company purchased Roberts Irrigation Products, Inc.
Plastro Irrigation was established in Israel in 1966 and is a leading provider of irrigation system components including peripheral equipment; agro-technical consultation; design and planning; installation assistance; and training.
Deere & Company (NYSE: DE - News) is the world's leading provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment.
Deere will combine Plastro with its current John Deere Water Technologies operations and T-Systems International, which Deere announced it had acquired in late May. The joint operations establish John Deere as the third largest agricultural irrigation company in the world.
"This sale demonstrates that we have been on the right course in our continuing effort to create value as a company," said Yonatan Bassi, chairman of Plastro Irrigation.
Michael McGrady, president of John Deere Water Technologies, said, "Precision irrigation will help the world meet its demand for increased productivity from agriculture. The world's population growth, demand for improved nutrition globally, and increased interest in renewable fuels all require much more precision in the management of the world's fresh water and arable land."
John Deere Water Technologies, San Marcos, California, is a manufacturer of high performance plastic micro and drip irrigation products for the agricultural, nursery, landscape, and greenhouse markets and was formed in June of 2006 when Deere & Company purchased Roberts Irrigation Products, Inc.
Plastro Irrigation was established in Israel in 1966 and is a leading provider of irrigation system components including peripheral equipment; agro-technical consultation; design and planning; installation assistance; and training.
Deere & Company (NYSE: DE - News) is the world's leading provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment.
Tuesday, June 3, 2008
More Can Be Done Now to Address the Growing Global Demand for Grain
Increasing Yields the Best Option, Says DuPont Leader at UN Food and Agriculture Conference
ROME, June 3 /PRNewswire-FirstCall/ -- More can be done now to increase the amount of grain farmers harvest from their land and help address the strong and growing global demand for grain, Mike Gumina, vice president of DuPont (NYSE: DD - News) business Pioneer Hi-Bred, told a United Nations Food and Agriculture Organization Conference being held here today.
"Improved farming practices and technology exist today that could help farmers in both developed and developing countries increase their productivity," Gumina said at the conference on world food security. "Better crop management practices and better seeds -- both conventional and biotech -- have tremendous potential to increase supply and improve the lives of farmers."
Gumina said that of the three ways to increase available supply -- more land in production, drawing from stored supplies, and increasing yield -- the only sustainable option is increasing yields. There is relatively little additional land that would not be environmentally sensitive that could be brought into production. Global stores of grain are at all time lows, he noted.
"While implementing and sustaining new agricultural practices is challenging, we've seen it work around the world," Gumina said. "Farmers in many countries like Ethiopia have increased corn yields by switching from open pollinated varieties to conventional hybrid corn. At the same time, farmers in countries like Spain, Argentina and the United States are increasing harvestable yield with biotech traits."
"Science companies like DuPont are investing heavily to develop seeds and provide technical support to help improve farmer productivity around the globe. By bringing together a number of advancements, DuPont is planning to increase yields for both its soybean and corn seed products by 40 percent in the next 10 years," Gumina said. "Farmers, agri-businesses, grain handlers and public extension programs should be encouraged to work together to address the near-term needs. Longer term, it is critical that government policies create an environment for advancing sustainable productivity."
Gumina outlined four long-term solutions that would increase productivity and help alleviate poverty and hunger:
-- Encourage research and the dissemination of technologies and techniques
for sustainable agriculture and water management. Public and private
sector scientists must collaborate to develop technologies that will
help crops be more tolerant to drought, salt and heat, and can utilize
nutrients more efficiently. Once produced, it is critical that they
are made accessible.
-- Deliver extension and agronomy programming at a local level to ensure
productivity increases are sustainable. The benefits of investing in
research and innovation can only be realized if the technologies can be
adequately disseminated.
-- Increase stewardship training in agricultural best practices at the
local level. For productivity gains to be sustainable, farmers must
use the best stewardship practices available to help improve soil
productivity and limit environmental impacts.
-- Establish secure land tenure and recognize female land owners. Women
play a key role across sectors and at all levels of society. Their
contributions must be recognized.
Pioneer Hi-Bred, a DuPont business, is the world's leading source of customized solutions for farmers, livestock producers and grain and oilseed processors. With headquarters in Des Moines, Iowa, Pioneer provides access to advanced plant genetics in nearly 70 countries.
DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
ROME, June 3 /PRNewswire-FirstCall/ -- More can be done now to increase the amount of grain farmers harvest from their land and help address the strong and growing global demand for grain, Mike Gumina, vice president of DuPont (NYSE: DD - News) business Pioneer Hi-Bred, told a United Nations Food and Agriculture Organization Conference being held here today.
"Improved farming practices and technology exist today that could help farmers in both developed and developing countries increase their productivity," Gumina said at the conference on world food security. "Better crop management practices and better seeds -- both conventional and biotech -- have tremendous potential to increase supply and improve the lives of farmers."
Gumina said that of the three ways to increase available supply -- more land in production, drawing from stored supplies, and increasing yield -- the only sustainable option is increasing yields. There is relatively little additional land that would not be environmentally sensitive that could be brought into production. Global stores of grain are at all time lows, he noted.
"While implementing and sustaining new agricultural practices is challenging, we've seen it work around the world," Gumina said. "Farmers in many countries like Ethiopia have increased corn yields by switching from open pollinated varieties to conventional hybrid corn. At the same time, farmers in countries like Spain, Argentina and the United States are increasing harvestable yield with biotech traits."
"Science companies like DuPont are investing heavily to develop seeds and provide technical support to help improve farmer productivity around the globe. By bringing together a number of advancements, DuPont is planning to increase yields for both its soybean and corn seed products by 40 percent in the next 10 years," Gumina said. "Farmers, agri-businesses, grain handlers and public extension programs should be encouraged to work together to address the near-term needs. Longer term, it is critical that government policies create an environment for advancing sustainable productivity."
Gumina outlined four long-term solutions that would increase productivity and help alleviate poverty and hunger:
-- Encourage research and the dissemination of technologies and techniques
for sustainable agriculture and water management. Public and private
sector scientists must collaborate to develop technologies that will
help crops be more tolerant to drought, salt and heat, and can utilize
nutrients more efficiently. Once produced, it is critical that they
are made accessible.
-- Deliver extension and agronomy programming at a local level to ensure
productivity increases are sustainable. The benefits of investing in
research and innovation can only be realized if the technologies can be
adequately disseminated.
-- Increase stewardship training in agricultural best practices at the
local level. For productivity gains to be sustainable, farmers must
use the best stewardship practices available to help improve soil
productivity and limit environmental impacts.
-- Establish secure land tenure and recognize female land owners. Women
play a key role across sectors and at all levels of society. Their
contributions must be recognized.
Pioneer Hi-Bred, a DuPont business, is the world's leading source of customized solutions for farmers, livestock producers and grain and oilseed processors. With headquarters in Des Moines, Iowa, Pioneer provides access to advanced plant genetics in nearly 70 countries.
DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
Ahead of the Bell: Monsanto rises in premarket
Monsanto climbs premarket as Goldman raises target, expecting higher seed and corn prices
NEW YORK (AP) -- Shares of Monsanto Co. climbed in premarket trading on Tuesday after a Goldman Sachs analyst raised his price target on the agricultural products company, predicting it will benefit from higher prices.
The stock rose $2.95 to $131.50 before the opening bell.
Robert Koort raised his target $15 to $155, saying the company's seeds and traits franchise will benefit from higher prices, larger planted corn acreage and increased market share. Steeper corn prices are the primary driver of higher prices, Koort said.
The analyst also saw the company benefiting from rising prices for its RoundUp herbicide due to greater global demand and tighter supply. He expects a 10 percent price hike.
In late May, Monsanto predicted its gross profit would more than double by 2012 due to increasing productivity and yields to farmers. In 2007, the St. Louis company's gross profit was $4.29 billion.
Koort's new price target implies an expected return of 21 percent on Monday's close of $128.55.
NEW YORK (AP) -- Shares of Monsanto Co. climbed in premarket trading on Tuesday after a Goldman Sachs analyst raised his price target on the agricultural products company, predicting it will benefit from higher prices.
The stock rose $2.95 to $131.50 before the opening bell.
Robert Koort raised his target $15 to $155, saying the company's seeds and traits franchise will benefit from higher prices, larger planted corn acreage and increased market share. Steeper corn prices are the primary driver of higher prices, Koort said.
The analyst also saw the company benefiting from rising prices for its RoundUp herbicide due to greater global demand and tighter supply. He expects a 10 percent price hike.
In late May, Monsanto predicted its gross profit would more than double by 2012 due to increasing productivity and yields to farmers. In 2007, the St. Louis company's gross profit was $4.29 billion.
Koort's new price target implies an expected return of 21 percent on Monday's close of $128.55.
Some Funds' Agricultural Harvests Have Been Bountiful
The credit crunch and fear of an economic slowdown have wreaked havoc and infected various corners of the global market. But one area of the market has blossomed despite harsh conditions, and that is agriculture. Surging oil prices that have increased investment in bio-fuels, rising demand from developing markets, and performance-chasing commodities speculators have pushed crop prices near record highs and helped agriculture industry stocks plow ahead.
Companies ranging from fertilizer producers to farm equipment manufacturers have been reaping the rewards of today's boom. For example, the world's largest potash exporter Canpotex, which is made up of fertilizer producers Potash Corp. (NYSE:POT - News), Mosaic (NYSE:MOS - News), and Agrium (NYSE:AGU - News), announced in mid-April that it will ship one million metric tons of the substance at $576 per metric ton--a $400 per metric ton increase from the 2007 contract price--to Chinese fertilizer importer Sinofert Holdings Limited. With the supply-and-demand balance strongly tilting in their favor, share prices of Potash, Mosaic, and Agrium have more than doubled since the beginning of 2007, whereas the S&P 500 Index has stayed flat. Triple-digit gains haven't been restricted to the fertilizer companies either. Seed producer Monsanto (NYSE:MON - News), for example, has experienced a strong run as well, thanks in part to its dominance in the expensive biotech seed market.
So how has the agricultural boom affected mutual funds? To find out, we screened for funds with the largest total stake in agriculture, agriculture machinery, and agrochemical stocks, as well as in fertilizer giants Potash, Mosaic, and CF Industries (NYSE:CF - News), which fall in the chemicals or mining industries. Not surprisingly, the two funds with the largest bets are sector-specific offerings, Fidelity Select Chemicals (NASDAQ:FSCHX - News) and ICON Materials (NASDAQ:ICBMX - News), which have 37% and 33% of assets in agriculture-oriented stocks, respectively. These funds, which fall in our mid-cap value category, have been among the group's best performers over trailing one-, three, and five-year periods.
To make things more interesting, we narrowed the list down to 10 diversified funds, which are listed in the following table.
Click here to see the table. http://news.morningstar.com/articlenet/article.aspx?id=239969
Plowing the Same Field
These 10 funds are similar in other ways. They're all growth-oriented funds. As agricultural stocks aren't a bargain these days, it's hardly surprising value funds didn't make the list. Most of the funds also are very aggressive. The momentum-focused Direxion HCM Freedom (NASDAQ:HCMFX - News) is the most assertive. The portfolios also are concentrated. With the exception of Fidelity Independence (NASDAQ:FDFFX - News), all of them have fewer than 65 holdings and a lot of assets stashed in their top 10 holdings--which almost always include Potash and Monsanto.
With concentrated bets on agricultural highfliers, it's no wonder six of the 10 funds land at or near the top of their categories for the year to date and one-year period. Agricultural winners couldn't offset sour picks in other industries at a few of the funds, though. For example, Bridgeway Aggressive Investors 1 (NASDAQ:BRAGX - News) and 2 (NASDAQ:BRAIX - News) have suffered from their larger-than-average health-care stakes so far this year, but their one-year returns remain strong. The majority of these funds also have rewarded shareholders over the long haul. With the exception of Shepherd Large Cap Growth (NASDAQ:DOIGX - News), Bridgeway Aggressive Investors 2, and Direxion HCM Freedom (the latter two funds lack a 10-year record), these funds all rank in the top 5% of their category over the 10-year period. Agriculture bets have certainly boosted long-term results, but the funds' returns were strong before the recent boom, suggesting they're not a one-trick pony.
"Miracle-Gro" Funds
We think highly of a number of these funds and their managers. Manager John Montgomery and his team at Bridgeway Aggressive Investors 1 and 2 use a quant-oriented, all-cap approach. And they've done a great job tweaking their quant models to make sure the funds stay competitive. CGM Focus (NASDAQ:CGMFX - News) and Quaker Strategic Growth (NASDAQ:QUAGX - News) are run by skilled managers who aren't shy about making bold asset-allocation calls. We like Janus funds' new manager Ron Sachs and his approach, but are uneasy about Janus' high investment-personnel turnover. Those seeking to ride the agricultural boom should start by taking a look at Bridgeway Aggressive Investors 2 (its sibling is closed to new investors), CGM, or Quaker. We offer a few words of caution, though. Agricultural stocks have already experienced a tremendous multiyear run, pushing their valuations higher, and there's a risk that there may not be much more upside--or perhaps more downside than upside--from here. So if you're chasing short-term performance you could be disappointed. A look at investor returns, which take investor purchases and sales into account, shows that Bridgeway and Quaker's shareholders have missed out on some gains due to untimely shifts in and out of the funds. Also, these funds, thanks in part to their successful agriculture holdings, have potential capital gain exposures ranging from 17% to 22% of assets. Investors may want to limit their investments to tax-deferred accounts to avoid paying taxes on potential distributions. Finally, given these funds' concentrated bets, they're best used as part of a diversified fund portfolio.
Companies ranging from fertilizer producers to farm equipment manufacturers have been reaping the rewards of today's boom. For example, the world's largest potash exporter Canpotex, which is made up of fertilizer producers Potash Corp. (NYSE:POT - News), Mosaic (NYSE:MOS - News), and Agrium (NYSE:AGU - News), announced in mid-April that it will ship one million metric tons of the substance at $576 per metric ton--a $400 per metric ton increase from the 2007 contract price--to Chinese fertilizer importer Sinofert Holdings Limited. With the supply-and-demand balance strongly tilting in their favor, share prices of Potash, Mosaic, and Agrium have more than doubled since the beginning of 2007, whereas the S&P 500 Index has stayed flat. Triple-digit gains haven't been restricted to the fertilizer companies either. Seed producer Monsanto (NYSE:MON - News), for example, has experienced a strong run as well, thanks in part to its dominance in the expensive biotech seed market.
So how has the agricultural boom affected mutual funds? To find out, we screened for funds with the largest total stake in agriculture, agriculture machinery, and agrochemical stocks, as well as in fertilizer giants Potash, Mosaic, and CF Industries (NYSE:CF - News), which fall in the chemicals or mining industries. Not surprisingly, the two funds with the largest bets are sector-specific offerings, Fidelity Select Chemicals (NASDAQ:FSCHX - News) and ICON Materials (NASDAQ:ICBMX - News), which have 37% and 33% of assets in agriculture-oriented stocks, respectively. These funds, which fall in our mid-cap value category, have been among the group's best performers over trailing one-, three, and five-year periods.
To make things more interesting, we narrowed the list down to 10 diversified funds, which are listed in the following table.
Click here to see the table. http://news.morningstar.com/articlenet/article.aspx?id=239969
Plowing the Same Field
These 10 funds are similar in other ways. They're all growth-oriented funds. As agricultural stocks aren't a bargain these days, it's hardly surprising value funds didn't make the list. Most of the funds also are very aggressive. The momentum-focused Direxion HCM Freedom (NASDAQ:HCMFX - News) is the most assertive. The portfolios also are concentrated. With the exception of Fidelity Independence (NASDAQ:FDFFX - News), all of them have fewer than 65 holdings and a lot of assets stashed in their top 10 holdings--which almost always include Potash and Monsanto.
With concentrated bets on agricultural highfliers, it's no wonder six of the 10 funds land at or near the top of their categories for the year to date and one-year period. Agricultural winners couldn't offset sour picks in other industries at a few of the funds, though. For example, Bridgeway Aggressive Investors 1 (NASDAQ:BRAGX - News) and 2 (NASDAQ:BRAIX - News) have suffered from their larger-than-average health-care stakes so far this year, but their one-year returns remain strong. The majority of these funds also have rewarded shareholders over the long haul. With the exception of Shepherd Large Cap Growth (NASDAQ:DOIGX - News), Bridgeway Aggressive Investors 2, and Direxion HCM Freedom (the latter two funds lack a 10-year record), these funds all rank in the top 5% of their category over the 10-year period. Agriculture bets have certainly boosted long-term results, but the funds' returns were strong before the recent boom, suggesting they're not a one-trick pony.
"Miracle-Gro" Funds
We think highly of a number of these funds and their managers. Manager John Montgomery and his team at Bridgeway Aggressive Investors 1 and 2 use a quant-oriented, all-cap approach. And they've done a great job tweaking their quant models to make sure the funds stay competitive. CGM Focus (NASDAQ:CGMFX - News) and Quaker Strategic Growth (NASDAQ:QUAGX - News) are run by skilled managers who aren't shy about making bold asset-allocation calls. We like Janus funds' new manager Ron Sachs and his approach, but are uneasy about Janus' high investment-personnel turnover. Those seeking to ride the agricultural boom should start by taking a look at Bridgeway Aggressive Investors 2 (its sibling is closed to new investors), CGM, or Quaker. We offer a few words of caution, though. Agricultural stocks have already experienced a tremendous multiyear run, pushing their valuations higher, and there's a risk that there may not be much more upside--or perhaps more downside than upside--from here. So if you're chasing short-term performance you could be disappointed. A look at investor returns, which take investor purchases and sales into account, shows that Bridgeway and Quaker's shareholders have missed out on some gains due to untimely shifts in and out of the funds. Also, these funds, thanks in part to their successful agriculture holdings, have potential capital gain exposures ranging from 17% to 22% of assets. Investors may want to limit their investments to tax-deferred accounts to avoid paying taxes on potential distributions. Finally, given these funds' concentrated bets, they're best used as part of a diversified fund portfolio.
Monday, June 2, 2008
Intrepid Potash first-quarter profit climbs
NEW YORK, June 2 (Reuters) - Intrepid Potash Inc (IPI.N: Quote, Profile, Research), which went public in April with a successful stock offering, said on Monday that first-quarter net income rose as prices for its crop nutrients increased sharply.
Net income rose to $33.1 million from $6.4 million a year earlier.
On a pro forma basis, earnings increased to 27 cents a share from 5 cents.
The company's shares rose 50 percent when they made their market debut on April 22. The IPO benefited from high prices for potash and other fertilizers as a result of rising demand for grain across the globe because of growing needs of developing economies and the increasing use of biofuels.
Shares of North American fertilizer producers have risen dramatically in the last 12 months -- and companies with sizable potash assets have been among the biggest winners in the sector.
Earlier this month, Chinese importers agreed to pay North American and Russian potash exporters more than triple the price they paid a year ago for the agricultural nutrient.
Intrepid Potash expects to produce 870,000 to 890,000 short tons of potash in 2008, at a production cost of $140 to $150 each. (Reporting by Euan Rocha; Editing by Lisa Von Ahn)
Net income rose to $33.1 million from $6.4 million a year earlier.
On a pro forma basis, earnings increased to 27 cents a share from 5 cents.
The company's shares rose 50 percent when they made their market debut on April 22. The IPO benefited from high prices for potash and other fertilizers as a result of rising demand for grain across the globe because of growing needs of developing economies and the increasing use of biofuels.
Shares of North American fertilizer producers have risen dramatically in the last 12 months -- and companies with sizable potash assets have been among the biggest winners in the sector.
Earlier this month, Chinese importers agreed to pay North American and Russian potash exporters more than triple the price they paid a year ago for the agricultural nutrient.
Intrepid Potash expects to produce 870,000 to 890,000 short tons of potash in 2008, at a production cost of $140 to $150 each. (Reporting by Euan Rocha; Editing by Lisa Von Ahn)
Windfall Profits for Big Food: Where's The Outrage?
As Food Prices Spiral, Farmers, Others Profit
WILLMAR, Minn. (AP) — The steepest run-ups in food prices since 1990 are hurting grocery shoppers, restaurants and school cafeterias but they're making others rich.
The winners in the new food economy include crop farmers selling corn and wheat for near-record highs after years of crushingly low prices. Ingredient makers like Cargill and ADM (ADM) are rife with profits. Fertilizer and tractor companies are cashing in.
Profits at seed and pesticide maker Monsanto Inc. (MON) reached nearly $1 billion last year — a 14-fold increase since 2003. They've tripled to $1.1 billion at agrichemical maker Syngenta (SYT) and agriculture divisions of DuPont Co. (DD) and Dow Chemical Co. (DOW) have also seen their earnings balloon. Cargill, which makes ingredients, boosted its profits to $2.3 billion, up nearly six-fold since 2001. Meanwhile, profits at agricultural processor Archer Daniels Midland Co. have more than quadrupled to $2.16 billion during the same period.
WILLMAR, Minn. (AP) — The steepest run-ups in food prices since 1990 are hurting grocery shoppers, restaurants and school cafeterias but they're making others rich.
The winners in the new food economy include crop farmers selling corn and wheat for near-record highs after years of crushingly low prices. Ingredient makers like Cargill and ADM (ADM) are rife with profits. Fertilizer and tractor companies are cashing in.
Profits at seed and pesticide maker Monsanto Inc. (MON) reached nearly $1 billion last year — a 14-fold increase since 2003. They've tripled to $1.1 billion at agrichemical maker Syngenta (SYT) and agriculture divisions of DuPont Co. (DD) and Dow Chemical Co. (DOW) have also seen their earnings balloon. Cargill, which makes ingredients, boosted its profits to $2.3 billion, up nearly six-fold since 2001. Meanwhile, profits at agricultural processor Archer Daniels Midland Co. have more than quadrupled to $2.16 billion during the same period.
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