I am always looking for events that shed light on trends that can make us some money, and I recently heard about a significant happening in the suburbs of Minnesota’s Twin Cities.
Silver Springs Golf Course in Monticello, Minnesota, shut down in 2009. Its two 18-hole courses and 18,000 square foot clubhouse that could hold a party for 400 were on the market for $11.9 million.
Over the last couple weeks huge woodchippers ate the trees and Caterpillars murdered the grass. Five-hundred-eighteen acres of fairways greens and sand traps were being prepared for corn and soybean cultivation. Welcome to the world of $7.50 corn and $13.75 soybeans—near record prices. It would not be surprising to see prices go up further with the floods in the Corn Belt and a drought in Russia.
For the machining world, the hot agriculture markets overlap the mining and energy booms, which are fueling a boom in hydraulics for tractors and earthmoving, and even woodchipping machinery.
If you’re looking for what’s hot, head for the Dakotas or rural Pennsylvania. Both are places with arable land and shale gas that can be reached economically with horizontal drilling. Even though natural gas is historically cheap at $4.70 per million BTU, the economics of drilling for gas are still extremely profitable. If gas becomes a viable transportation fuel, like it should, it will be a giant bonanza for the drillers who are tiring of the 90 percent take of confiscatory foreign governments.
If you’re interested in the stock market, I would short Calloway Golf and buy Cat.
Question: Is it possible to be a farmer and a fulltime machinist?