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.
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.
And I say ADM is the blue chip of ag commodity traders and processors. If you read the reports, each Division reports separately. I think there is a lot of information "for those skilled in the art." All recent annual reports must be viewed recalling that Sept 2008 saw a tremendous commodity bubble burst. I have been concerned that some of the rise in the past 10 months in commodities (most dollar-denominated) is due to the falling dollar, but poverty/hunger statistics (rising), and rebound in Asian economies make me think part of the rise is a return to healthy exports for US grains.
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.