02-28-2014, 07:01 PM
Eric, I noticed that when I was first looking at DE. There was a freeze in the early 00's also.
I was "guestimating" at the time that earning would drop 50-60% and the div would be frozen for a couple years if the farm economy went into a tailspin. At that magnitude, the div would still be covered but it wouldn't be pretty. Also have to take into account that with the advances in the emerging markets, China & India specifically, the demand for higher quantity/quality food that agribusiness can produce will limit the downside. That's just a guess on my part. I do know the Chinese market has really screwed up pricing when trying to buy Bordeaux "en primeur" so why not food?!?
I was "guestimating" at the time that earning would drop 50-60% and the div would be frozen for a couple years if the farm economy went into a tailspin. At that magnitude, the div would still be covered but it wouldn't be pretty. Also have to take into account that with the advances in the emerging markets, China & India specifically, the demand for higher quantity/quality food that agribusiness can produce will limit the downside. That's just a guess on my part. I do know the Chinese market has really screwed up pricing when trying to buy Bordeaux "en primeur" so why not food?!?