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Kay/NC
Honored Advisor

Re: Chinese investors buying farmland?

There should always be need for production in closer proximity to the plants in Va and NC. I voiced a similar concern decades ago, and was told they need local hogs - then, that was independents - to keep the lines running, when weather precludes Midwest hogs from arriving in time.

I guess if you had read the memos that came to us directly, when the acquisition was announced, you would feel as I so...that there's a place for us going forward. I have since been given a firm commitment of our continuing relationship as growers, from the grower liaison.

Anyway, I think it is best to keep some politically correct family growers hanging on...the dollar sign and the bottom line might depend upon that, too.
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buckfarmer
Senior Contributor

Re: Chinese investors buying farmland?

 
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buckfarmer
Senior Contributor

Re: Chinese investors buying farmland?

Sorry for the blank post. When people get to talking about China buying up, or controlling America in some way it remindes me of similar situation with Japan about 30 years ago. How that turned out may depend on your perspective.
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Re: Chinese investors buying farmland?

Buy up everything they can get there hands on at whatever cost. 5 years down the road, file bankrupcy, liquidate, another chinese firm buys up the assets for pennies on the dollar. Now we have cheap pork!!! A smart business move for sure.
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BA Deere
Honored Advisor

Re: Chinese investors buying farmland?/North-Central Iowa Farmland

Thanks for the headsup, RSW.  So far around here when a farm is sold it`s such big "news" that everything is Monday morning quarterbacked and the pedigrees of the buyer, selling price and the contending bidders are all hashed over.  Maybe the Chinese don`t think our CSR`s are high enough to mess with or maybe these ol` Norwegians just plain bid too much  😉

 

If Chinese decided to put their "Bernake dollars" into Iowa farmland to fed the Smithfield pigs they bought, you can bet they`ll be as hush-hush as they can or laws might be tightened on foreign ownership.

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BA Deere
Honored Advisor

Re: Chinese investors buying farmland?

The thing with China is year after year we run an over $300 billion trade deficit with them, that is enough money in 1 year to buy 20 million acres at $15,000/acre.  There are also 122 billionaires in China.  To them less than 7% growth is a "slow down".  We`ve basically went to Walmart and bought plastic flamingos from China and sent them our money, now they are sitting on dollars that get cheaper everyday.  With their demand for food it would make sense to throw some money at that issue.  The day may come when our supermarket shelves are a little skimpy due to a drought or something and we just watch the trainloads of Chinese grain and pork headed for the west coast to fill their demand first.

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Red Steele
Veteran Advisor

Re: Chinese investors buying farmland?

BA, that exact scenario played out in 1840's Ireland, where the corn left Cork Ireland and other ports to go to England to feed their cows while half the Irish Island either starved to death, or rode one of the "potato" boats to places like America to start over.

 

However, Ireland did not possess the foremost arsenal of nuclear weapons in the world, and actually was just a few generations removed from being savages like the American native "Indians". THat is why when an Irishman tries to be a racist, it is so ironic.

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Re: Chinese investors buying farmland?

There are probably 4 dozen guys trying to figure out how to rent it.

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rswfarms
Senior Contributor

Re: Chinese investors buying farmland?/North-Central Iowa Farmland

Yes, BaDeere, when a farm sells in my area. everything about the guy who bought it and who was bidding on it is re-hashed over in the following days. When I was buying alot of Iowa farmland in the 1986 to 1989, I was refered to as "That Guy From the Twin Cities". They thought I had alot of money. little did they know that I was as poor as a dog and buying all that Iowa farmland with borrowed money!!!!! LOL

But back to the 2 Chinese guys buying farmland in my area, it will be interesting to see what happens now that the Chinese were given the go-ahead to buy Smithfield. $20,000/acre I could be bought out my the Chinese and move to Florida with all the money and just retire from the farming world!!!!! LOL

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Kay/NC
Honored Advisor

Re: Chinese investors buying farmland?

Smithfield has never squeezed our margins. We can honestly say that, given healthy pigs, we are only shorter on some escalating costs...so far, nothing we cannot handle. Since the company has made such constant and concrete assurances about taking bits growers forward profitably in this deal's PR leadup, it would be very difficult for them to explain different outcomes down the line. I have been reassured we will go forward as usual. Anything substantially less would create a very loud noise....
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