...On the other hand Craig Pirrong seems to respect him and, although I don't have much interest in Pirrong's snark, the Prof. probably knows as much about commodity storage as anyone.
Storage, being the nexus between physical and financial, is the aspect of the commodity biz that matters most so anyone who can instruct me is jake in my book....just as my attention was being directed to this story on storage.
From Reuters via the Dickenson Press:
Farmers store fertilizer to fight dealers’ pricing power
WINNIPEG-Canadian farmers are plowing profits from bumper crops into fertilizer storage facilities to mitigate the pricing power held by major retailers and producers.
Having their own storage lets farmers buy nutrients more cheaply during the off-season and creates fewer transport bottlenecks in the spring planting season.
Over time, the practice might erode the steep premiums farmers pay in the spring to retail businesses owned by Agrium Inc., Richardson International and Cargill, while shifting distribution patterns of producers Potash Corp. of Saskatchewan, Mosaic Co. and CF Industries.
The trend is part of a wider shift by North American farmers to gain more control over both costs and the prices they collect. In the U.S., farmers are building silos and bins to store grains and oilseeds until crop handlers entice them to sell.
Canadian farmers produced record-large harvests of wheat and canola in 2013, boosting their net income to Canadian $6.4 billion, the fourth straight year of gains, according to the most recent Statistics Canada data.
After diammonium phosphate prices spiked in 2008 to $1,200 per tonne, compared with less than $500 a tonne today, Saskatchewan farmer Kevin Hruska spent about Canadian $400,000 in 2010 to build storage for about 6,000 tonnes of blended fertilizer....MOREHT: Big Picture Agriculture
