ALF - Allied Farmers Limited

[Beagle]

Gee Beagle. Did you get out of the wrong side of bed this morning?

I spoke about it being a potential game changer, which it was. As you know I have never been a short term trader, particularly in ALF unless accumulating these shares over a 7 year period falls within the bounds of short term.

Attachment 9594

I obviously have a lot to learn in making a CG of a pitiful 400% over 5 years. More if you go back 7. You think SUM (which I hold) will manage that?

I have no intention of selling.

Just felt like yanking your chain mate, no hard feelings I hope. Agri services cyclical microcaps are not for me but good luck with it.
Just be careful, Pie funds thought they'd done really well with unrealized capital gains on Trilogy much of which evaporated when they tried to realize them.
PS Thanks for the advice to keep buying SUM even though the price didn't make any sense at around $5, much appreciated.
Wonder what happened to Couta1's RYM half price SUM relativity theory

[dodgy]

Gee Beagle. Did you get out of the wrong side of bed this morning?

I spoke about it being a potential game changer, which it was. As you know I have never been a short term trader, particularly in ALF unless accumulating these shares over a 7 year period falls within the bounds of short term.

Attachment 9594

I obviously have a lot to learn in making a CG of a pitiful 400% over 5 years. More if you go back 7. You think SUM (which I hold) will manage that?

I have no intention of selling.

Hi all,
Voygor1 is happy to hold and so am I. Hasn't been spectacular EXCEPT they are slowly clawing their way back from almost guaranteed Hanover extinction based on conservative common sense (sadly lacking in NZ listed companies),, whilst embracing the techno of the future in a commodity / weather driven environment. Good on them !! And it wouldn't hurt if a few shareholders contact management / directors with a bit of support or attend the AGM to hear the real oil - no pun to Labour/greens.
Have a Happy Easter.
-dodgy

[Vaygor1]

Just felt like yanking your chain mate, no hard feelings I hope. Agri services cyclical microcaps are not for me but good luck with it.
Just be careful, Pie funds thought they'd done really well with unrealized capital gains on Trilogy much of which evaporated when they tried to realize them.
PS Thanks for the advice to keep buying SUM even though the price didn't make any sense at around $5, much appreciated.
Wonder what happened to Couta1's RYM half price SUM relativity theory

SUM still a good buy in my opinion. A possible CG of 400% in 5 years for them? Difficult to imagine but not out of the question with a bit of bull market assist.. I think RYM did it at one stage some time back. Couta's relativity theory under sustained pressure now !! :P

Happy Easter to all.

PS. I tentatively think another ALF divvy due before Christmas.

[golden city]

I am happy to buy more at 8c. Which I have put order in and already accumulated a big lot

[GRIFFIN]

Just wondering what impact Mycoplasma Bovis will have on this company as it is centered at their core business of stock trading and spreading wider by the week.

[bull....]

Just wondering what impact Mycoplasma Bovis will have on this company as it is centered at their core business of stock trading and spreading wider by the week.

i wouldnt think much ( just guessing ) as they cull them and still send them to the supermarkets for you to buy. overseas they manage the issue and live with it.

[Snoopy]

Just wondering what impact Mycoplasma Bovis will have on this company as it is centered at their core business of stock trading and spreading wider by the week.

The fortunes of Allied Farmers are tied to the trading of animals. Profits will decrease with a decrease in volume and a decrease in price.

Estimates I have heard to rid the country of Mycoplasma Bovis would suggest a cull amounting to 5-10% of the herd. With 11m Cows and Cattle about in NZ, that means 550,000 to 1,100,000 animals. So while the numbers culled already sound horrific, you would have to assume we are only just getting started. Not all farms quarantined will end up infected, but cattle movement will nevertheless be restricted. So you could find that 10-15% of all cows will not be allowed to be moved and therefore can't be sold through the likes of AWF.

Meat Works tend to offer a 'market price' for animals. They don't go through the cattle yards. Also with plenty of cows 'available' for slaughter, we might expect the price offered to go down. And that lower price will flow through to the sale yards where the cattle that can be sold are being sold.

So I would expect a significant effect on Allied Farmers in the short to medium term. How significant? If cows make up 50% of the profit from sale yards, prices are down by 15% and volumes are down by 15%, then gross cow sale revenue will be down...

0.85 x 0.85 = 0.72 i.e. a 28% reduction

But if cows are only 50% of the business, the net revenue reduction at Allied Farmers will be down about 14%. Profit should be down that much and maybe a bit more. That is how I see the situation unfolding.

SNOOPY

[Lola]

[QUOTE=Snoopy;715936]The fortunes of Allied Farmers are tied to the trading of animals. Profits will decrease with a decrease in volume and a decrease in price.

Estimates I have heard to rid the country of Mycoplasma Bovis would suggest a cull amounting to 5-10% of the herd. With 11m Cows and Cattle about in NZ, that means 550,000 to 1,100,000 animals. So while the numbers culled already sound horrific, you would have to assume we are only just getting started. Not all farms quarantined will end up infected, but cattle movement will nevertheless be restricted. So you could find that 10-15% of all cows will not be allowed to be moved and therefore can't be sold through the likes of AWF.

Meat Works tend to offer a 'market price' for animals. They don't go through the cattle yards. Also with plenty of cows 'available' for slaughter, we might expect the price offered to go down. And that lower price will flow through to the sale yards where the cattle that can be sold are being sold.

So I would expect a significant effect on Allied Farmers in the short to medium term. How significant? If cows make up 50% of the profit from sale yards, prices are down by 15% and volumes are down by 15%, then gross cow sale revenue will be down...

0.85 x 0.85 = 0.72 i.e. a 28% reduction

But if cows are only 50% of the business, the net revenue reduction at Allied Farmers will be down about 14%. Profit should be down that much and maybe a bit more. That is how I see the situation unfolding.


Points noted, Snoopy, but the replacements will need to come from somewhere and likely to be more than in the past, so ALF probably well placed. Time will tell.

[Snoopy]

Points noted, Snoopy, but the replacements will need to come from somewhere and likely to be more than in the past, so ALF probably well placed. Time will tell.

Yes I was going to add that longer term, the culled cows will have to be replaced. And that could mean more farmers competing for stock bidding up the price: Good for ALF. But I feel that is a bit akin to saying that the Christchurch earthquake has been 'good' for GDP growth. Strictly true, but it would have been better to have no disaster to start with.

SNOOPY

[freddagg]

Yes I was going to add that longer term, the culled cows will have to be replaced. And that could mean more farmers competing for stock bidding up the price: Good for ALF. But I feel that is a bit akin to saying that the Christchurch earthquake has been 'good' for GDP growth. Strictly true, but it would have been better to have no disaster to start with.

SNOOPY

It will not be in the longer term, any cows culled will need to be replaced immediately. I am sure that the industry can cope with whatever cull is needed.
Options are to keep more heifers as replacements and cull fewer older cows. This will of course mean more shuffling of cows around the country, good for ALF but not so good for controlling disease spread.