Posts tagged with agriculture
That is assigning numbers to price-points and time-points; contingencies form a “surface”.
I tend to forget that for farmers, the actual landscape—the actual (sur)face of the Earth is itself the risk landscape.
- Hillocks get more sun (could be good or bad depending on the cooling-degree days
, the chance of frost, and the abundance of rain)
- Dells and ravines get more water—which could be good if it’s dry,
or catastrophic in case of flood.
- Of course that depends on the crop type. Rice wants to be flooded. Even I know that.
- And just like derivatives, agriculture has its term contingencies. Water in autumn is too late to grow the baby saplings but, too, a flood might not be as bad for the granary as it was for spring's seedlings.
- Symbiosis between “funded” (planted) neighbours could result in a “value-added merger” if, for example, the bugs which are attracted to one plant fend off another plant’s predators.
- A monogenetic crop could all be wiped out by the same disease.
- Diversification, then, would seem to mirror finance as one wants to invest fully in the “cash crop” (let’s say a junk bond), but risks increase as eggs are concentrated in one basket.
- Or say you wish that lucrative bridge loan’s IRR were applied to your entire portfolio—perhaps this is like a plant with rare seeds, or a plant that only takes in exactly perfect parts of your land.
- If a farmer could get “negative correlated assets” (half the plants do better in dry; half do better in wet), that would reduce the “portfolio variation”.
- Is there anything in finance that, like alfalfa, regenerates the “soil” for the next year’s crop?
- We speak of “exposure” in finance—well, furrows in la terre literally change the exposure to the sun over the course of its chariot ride across the sky!
Is it possible, then, to apply the lessons of modern portfolio theory to crop selection?
- Spain produces 4 times as much olive oil as Italy.
- Price of a tonne of olive oil has halved over the aught’s.
Construction laborer Yi Jichun has never heard of Illinois or Iowa. But the migrant worker’s favorite comfort food comes straight out of the U.S. Midwest: soybean oil.
The world’s biggest consumers of edible oils, Chinese households have developed a taste for the stuff that would make a county fair fry cook proud. Be it a simple stir-fry, poached fish or deep-fried pork ribs, many Chinese diners love their grub covered in an oily sheen. Jugs of the golden liquid make popular gifts for Chinese New Year.
"Without the oil, it would taste too plain,” Yi said as he tucked into a lunch of sliced cucumbers and chicken drumsticks slathered with grease. “I wouldn’t want to finish it.”
One night in the winter of 1907, at what we have always called “the home place” in Henry County, Kentucky, my father, then six years old, sat with his older brother and listened as their parents spoke of the uses they would have for the money from their 1906 tobacco crop. The crop was to be sold at auction in Louisville on the next day.
They would have been sitting in the light of a kerosene lamp, close to the stove, warming themselves before bedtime. They were not wealthy people…. [T]here would have been interest to pay, there would have been other debts. The depression of the 1890s would have left them burdened. Perhaps, after the income from the crop had paid their obligations, there would be some money that they could spend as they chose. At around two o’clock the next morning, my father was wakened by a horse’s shod hooves on the stones of the driveway. His father was leaving to catch the train to see the crop sold.
He came home that evening, as my father later would put it, “without a dime.” After the crop had paid its transportation to market and the commission on its sale, there was nothing left. Thus began my father’s lifelong advocacy, later my brother’s and my own, and now my daughter’s and my son’s, for small farmers and for land-conserving economies.
The economic hardship of my family and of many others, a century ago, was caused by a monopoly, the American Tobacco Company, which had eliminated all competitors and thus was able to reduce as it pleased the prices it paid to farmers. The American Tobacco Company was the work of James B. Duke of Durham, North Carolina, and New York City, who, disregarding any other consideration, followed a capitalist logic to absolute control of his industry and, incidentally, of the economic fate of thousands of families such as my own.
Because I have never separated myself from my home neighborhood, I cannot identify myself to myself apart from it. I am fairly literally flesh of its flesh. It is present in me, and to me, wherever I go. This undoubtedly accounts for my sense of shock when, on my first visit to Duke University, and by surprise, I came face-to-face with James B. Duke in his dignity, his glory perhaps, as the founder of that university. He stands imperially in bronze in front of a Methodist chapel aspiring to be a cathedral. He holds between two fingers of his left hand a bronze cigar. On one side of his pedestal is the legend: INDUSTRIALIST. On the other side is another single word: PHILANTHROPIST. The man thus commemorated seemed to me terrifyingly ignorant, even terrifyingly innocent, of the connection between his industry and his philanthropy. But I did know the connection. I felt it instantly and physically. The connection was my grandparents and thousands of others more or less like them. If you can appropriate for little or nothing the work and hope of enough such farmers, then you may dispense the grand charity of “philanthropy.”
Agriculture in the U.S. is shifting to areas like Iowa and Nebraska, where no one would live for the fun of it because it isn’t beautiful as in Montana!
Here in Montana, people do want to live for the fun of it, and so they are willing to pay much more for land than agriculture on the land would support.
The Bitterroot is becoming a horse valley. Horses are economic because, whereas prices for agricultural products depend on the value of the food itself and are not unlimited, many people are willing to spend anything for horses.
Allen Bjergo, in Collapse