Brownfield

Potash, China and the Fire Under Agricultural Commodity Prices

Filed in Brownfield, commodities, earnings, Gold, silver by on May 26, 2010 0 Comments
Potash, China and the Fire Under Agricultural Commodity Prices

There are factors building up pressure under the price of other commodities. Demand for food is growing and set to explode. Smart investors will be properly positioned to take advantage when agricultural commodity prices skyrocket. One of the first things people change as they emerge from poverty is their diet. They move toward more meat and a greater variety of fruits and vegetables. So while we may wonder about how many cars or toasters the brave new world’s top consumers will want, we know for sure they’ll eat more food. But the web of food production shivers and shakes in the short term in response to economic pressures. Farmers cut back — like everybody else — in 2008 and 2009. One of the things they cut back on was fertilizer. They used 30–40% less potash than usual, for instance. Potash, a key fertilizer ingredient, saw six consecutive quarters of falling volumes. Farmers ran down their inventories. All that deferred buying pushed North American potash inventories below their five-year averages — first time that’s happened since November 2008. In some cases, farmers didn’t apply potash at all. Potash stays in the soil for up to two years, so you can skip applications. But you can do that for only so long. In any event, farmers are now returning to the market. One potash company reported its highest potash volumes ever in the first quarter of 2010 — a fivefold increase, year over year. With corn at around $4, famers have every incentive to buy fertilizers. Grain prices support good returns for farmers at current fertilizer prices. Longer term, there will be pressure to produce more food. …

Continue Reading »

Barrick (TSE:ABX), Gold Fields (NYSE:GFI), Newmont (NYSE:NEM.N) Increasing Brownfield Exploration

At a gold mining summit in Peru this week, heads of Barrick (NYSE:ABX) (TSE:ABX), Gold Fields (NYSE:GFI), Newmont (NYSE:NEM.N) said they’re looking to increase exploration close to their existing mines (brownfield exploration) as a way increase gold production at lower costs. There is also much less risk, as they’re in a proven find area. The reason for this, while for the reasons above, is

Continue Reading »