Have a listen/read what J. Rogers on yahoo has to say about agricuture. I agree with his thinking that food prices are going higher and at times in the future ag commodities will be in low supply. Of course this year is not a problem as supplies seem to be ample, it only takes one bad growing season for it all to change and that is inevitable and will be more acute due to the growing world population. Even in good years with a glut of yield there is a need to move ag commodities from areas of glut to shortage and that is why adm will always have demand, especially since it is so diversified around the globe. ag is the growth sector and adm is the leader in this sector. jmho. 2009 might just be the best chance/year to buy adm that comes along in a long time.
If one reads the UN predictions on population growth and how it translates to water and food demand it is apparent that big demand growth is coming. The ceo said in a talk at the 2009 world food prize Borlaug Dialoge: " World food demand will as much as double by mid-century, and by the same time, energy from traditional sources will be insufficient to meet global demand." Buying adm is a no brainer. Even with mediocre management adm will grow its earnings organically. This whole sector will do more business and adm is the best leader in this sector. I also like moo, agu, pot, bg, cpo but not as much as adm at todays p/e. also provides a nice dividend while we await the increased business. I am at a loss to understsnd that Warren Buffet and friends have not made a move on adm, and glad they have not taken it private or something.
Actually the adm ceo lecture on world food demand is optimistic in that she thinks it can be met. I read on the world news web site another article from teh N.Z Herald.co.nz thursday oct 22 by a Steve Conor: "Race to feed extra Billions": " Global food production needs to be increased by between 50% to 100% if wide spread famine is to be avoided as the human population expands rapidly, leading scientists say." "A second green revolution is needed in agriculture to feed the extra 3 billion people who will be added to the existing population by 2050." Goes on to say water for irrigation, and soil degradation are major challenges. Bottom line is both higher commodity prices and more demand for ag services and ag transportaion are coming. That is the trend. 2009 might be one of the best opportunities to get into adm at a discount. for long term buy and hold.
Every quarter I keep saying that ADM really needs to report growth in earnings and sales, and every quarter there is another reason that things aren't as good as they should be. Unless my memory fails me, last quarter is was a "trading loss', the quarter before that was the "drop in ethanol prices" and low margins for corn.
I really hope that there isn't yet another excuse coming down the pike.