Farmer Diaries

In my opinion, the biggest change to the world over the next five years will be the application of AI to government services.  Let's be honest here, Governments provide services, much of which are pushing bits of paper from  A to B.   A lot of the "work" is a reflection of a world before computers.   If an accountant, trader, banker and a lawyer can be replaced by AI then civil servants should be the first to go.    From my experience (and it has been limited) the vast majority of civil servants are there to collect and collate information, and disseminate the results of new rules and laws as drafted by politicians and senior civil servants. In a nut shell, probably in excess of 40% of current civil servants could be replaced by AI.   Now, the tricky part, as the US government has recently discovered, is who are the essential bits and who are the redundant bits.  Part of the problem is identifying the right one, and again this is wh...

It has been the most successful investor strategy over the past 30 years, but like everything it must come to an end.  For 30 years, hedge funds, private equity funds and other investors have been borrowing in Yen and investing all over the world.   The truth was that for the past 30 years the zero interest rates and the slowly depreciating Yen allowed the financial community to borrow massively (aka leverage) and generate higher returns.    How does this work?  Well you borrow $1 million in the tokyo market, effectively you borrowed Yen 100 million at a rate of exchange of 105 to the US dollar.  The interest rate on this loan is 1.3%.  That's the start, the risk is that the Yen rises, that's it.  You take that money and invest it at 4% (buying US treasury 10 year bonds for example), and you take the yield and declare it as your profit.   Now let's say that you do this for $100 million, and that you used $2 million of your own capit...

The new American CPI numbers came out yesterday and the news is excellent, inflation is down 0.5% which no one expected!    That's the good news, now the not so good news.   Oil prices are stripped from that dataset, its normal, fuel prices distort the "economic indicator".  However, the CPI figures have to be taken with a grain of salt (always mister negative – as the title indicates).  The 2020 pandemic led to massive consumer price increases.  What no one noticed is that since then prices have not fallen back, as a stupid example. In 2019, a brick of espresso coffee was £2.35.  Last week the same brick of espresso coffee was £6.75. Same brand, same size – almost three times as expensive.   Now, the point is as follows, and it's important, Americans have for years replaced revenues to meet their expenses with savings and debt.   This is not a secret to anyone in the world.   Americans have more debt today and less s...

Space X:  I don't know if collapse is the right word, but the shares are currently trading at $123.00 down from a peak of $201 and an issue price of $165.   The problem with SpaceX is that it generated no profits, in addition, the company has aggressively moved into the world of AI, which has little to do with its space venture. In fact, the free cash of the company appears to be destined to that endeavor rather than rocketry. Truth Social: In another note, I made the comment that Truth Social Media had increased the value of its intangible assets by nearly $1.1 billion (up from $25 million).   Apparently, there is an explanation, it's the brand. You see, Truth social is so valuable (despite generating no profits and declining revenues) that the company management (with the agreement of the auditors) has assessed that the company has an additional intangible value of $1.075 billion.  I'm just not interested enough to get to the bottom of all this.  Bo...

Nobody should be surprised by Europe's recent weapons' procurement announcements.  On one side, the word is out that Europe is looking, and has a verbal agreement with Donald Trump to manufacture Patriot missile systems under license.   However, Europe is also looking at short range missiles out of Ukraine.  Guess which system will be running first; sorry no contest, it will be the Ukrainian system, first its short range, (less than 1,000 NM) which matches the European theater of war (aka Russia), second, a deal with Trump is never real even when it is signed, looked at all the agreements he signed over the past two years, few lasted more than 90 days before Trump changed his mind.    The truth is that the Patriot deal is probably vaporware, and will never be implemented, but it gives Trump the oxygen he seeks with his base, which is the only thing that matters to him.  He can say that the Europeans are "begging" for US missile systems.  He probab...

Mitch McConnell is an American politician who faces some health challenges.  Apparently, his office released a photo of the man, with his wife, holding a newspaper…the amazing thing is that the article that is clear to read is from an article written in 2023.   Nearly three years ago. Now, it is understood that politicians are liars, it is the nature of the beast, you cannot govern if you let the electorate decide what the issues of the day are, because the electorate is fickle.  Take Brexit being an issue in the UK press in 2026.  It's a non issue, there is no possibility of Britain returning to the fold.  There is more hope for Canada to become a member of the EU, after all it has a border with Denmark… The sad truth is that after the death of Lindsay Graham the GOP's power structure is in trouble.  The funny bit is that the state of South Carolina has a very clear and clean process to replace the man.  It will be interesting if Trump and his ga...

The truth of the matter is that a deeply integrated economy to the United States is walking away.   First it is important to understand that about half of Canada's exports to the US are natural resources.  Some are mighty critical; oil, gas, electricity, timber and other minerals including Potash, where Canada sells about 90% of all potash used in the United States.   Tourism is another $40 billion.    Now, vehicles and parts are about $40 billion.  It is largely understood that the US's intention is to retrieve these operations from Canada. On the other side of the equation, what Canada imports from the US is foodstuff, vehicles and finished goods (do you know that there are other countries that sell finished goods).  The issue that the Canadian Prime minister raised is that he wants to diversify away from the United States its exports, imports will take care of themselves.   As an aside the Canadian Federal government has given gr...

There have been a number of reports that state that either the country is better off or worse off.  Right now in 2026 it is clearly worse off.   It stands alone with no allies, the dream of the Brexiters was that Britain would stand on its own two feet, and become a middle power courted by Europe and by the United States, plus they could get rid of all these pesky foreigners (which they never met…) The truth is complex, right now Britain is worse no doubt about it.  The economy is slowing faster than Europe and there is no lifeline from the Americans.  However, this is not a game of football, there is no end in sight to the process.  Europe has some massive challenges, already Italy, and Portugal are seeing the ravages of a falling population.  Germany has been better at hiding the impact, but they too face massive problems.  The truth of Europe is that it is highly dependent on the credit of Germany…there are implications going forward.  Ger...

When chocolate bars are no longer made with chocolate.  About a decade ago, I discovered that pringles chips had no potato in its ingredient list.   Yeah, I know considering what the packaging seems to imply.  However, American chocolate manufacturers have begun replacing cocoa and its derivatives with chemicals that are cheaper, they apparently also changed the composition of the "chocolate bar"  it no longer melts… Now, I have long discussed our business model, we focus on the higher end, "organically" grown crops and sell mostly to high end buyers and our own transformation businesses (aka our meat pie business as an example).    Last week an expose was made of the McDonald hamburger that was now mostly if not entirely made out of corn and its byproducts.  Now, I have no idea if McDonalds in the UK does this too, last time I had a big Mac was in the 1990s.   It seems that the American food industry has decided to double down on ingred...

The shares of Truth Social were listed in 2024 and the price quickly rose from the $17 dollar issue price to about $50.  The share price was range bound for nearly a year, when it eventually faced reality and started to fall, as all the vaunted management promises came to nothing.  The truth is that quarterly earnings while not in freefall,  are only above $800k, the management costs do not justify the share performance, which has been consistently negative since it was listed two years ago.    As of June 30th the share price stands just below $7.50 a share, market cap has collapsed to around $2 billion (still a lot if you consider that the operating cash flow is negative).  My guess is that over the next year the price will continue to fall, until it is below $1.00 and joins the pink sheet. Another company did something similar more than a decade ago, it was called the Grill Cheese Truck Company, which at one point had a market value in excess of $100 mill...

A week like this makes you a believer that global warming is an existential threat. Thank God we are not in London, still it's very warm and very uncomfortable for our cattle, especially for our dairy herd.  During the summer they are outside, but now they remain inside the barn away from the sun.   The ventilation systems helps, but still not a very pleasant time for our herd.   The ones that are doing the best are the pigs in the forest.  Chickens not so much, we have tried to place the meat chicken enclosure near the tree lines away from the sun, but we may have to butcher them early, they may die from heat strokes. One unexpected outcome is the increased efficiency of our biodigestors, thank god because our greenhouse fans are operating 24/7 to keep the temperature down in the greenhouses.  One good thing about the early June weather is that the water table is high.  In fact, the sudden heat has been helpful in drying out our fields that saw m...