Input Capital

[PrairieDude]

What are others opinions in regards to their new canola program that would advance funds for canola for the next 6 crop years. Guarantee of $450 per mt net for a set bushel volume over that time period.

[hobbyfrmr]

It sounds really good. They are covered in case of farmer/customer default.
Around here, canola accounts for at least 45% of seeded acres, so, statistically that bodes well for Input Capital.Corp.
I am following the stock and plan to buy shares somewhere around $2.23, if it gets that low.


http://m.theglobeandmail.com/globe-investor/markets/stocks/summary/?service=mobile&q=INP-X

[ALLFARMER]

Company has no debt, is cash flow positive and only 18months old. 26 percent owned by insiders. All loans secured to the farmers land.

I am in at 2.40

[Grahamp]

We did a deal with them last year and so far have been very happy. It allowed us to undertake a major diversification into poultry so we weren't so dependent on grain farming, and we were able to sell a big portion of our grain in February for October delivery. Something that would have otherwise been very difficult for me cash flow wise. Lastly we used a small percentage to invest in INP as a hedge against rising canola prices. (The assumption being the shares should go up if canola rallies significantly and we have to deliver canola far above what we received from INP. )

[ALLFARMER]

Thats the beauty of doing an input deal....spend the money on what ever you see fit. Buy your brother out, buy your parents out, buy your x-wife out, make a land purchase, grow your business.

[bucket]

And when things go south - Input Capital owns your farm.

[Hopperbin]

I can see it being popular if canola is under 10.22 per bushel. Question is the advance interest free?
Where do you deliver to?

[Grahamp]

The delivery points are on a case by case basis. (I think they were aligned with Viterra but not sure if that will continue.

You have a yearly canola commitment so you don't pay interest per se, but the 450 I assume has the cost of money built in. The advance would be for less than that.

Bucket
I agree that the advance is two edged sword. Wouldn't want to have more than 10-15 bushels per year committed to them. We are looking at a horrible canola crop but still will have no trouble with our obligation.

[hobbyfrmr]

Bucket, they will only take the property you have signed overs as security. Pretty good chance they will rent it back to you if you sign up another property and continue to do business with them.

It's all about the land.
Farquhar ran Assiniboia Land Corp. they bought land from farmers, then rented it back to them. the farmer would then use the money from land sale to expand by renting lots of land and purchasing larger, more efficient machinery. There was a couple from Mossbank (?) who were young farmers of the year with this model. I think they did well, they had an inputs dealership and some kind of alignment with Wigmore Farms.
I think last spring they had an auction sale, retired millionaires (?) at 43 yrs old.
I will buy shares, not do more work, or bet against weather and world prices. In the end, it's all about the land.

[bucket]

He got bailed out by CPP. Taxpayers bailed him out. And they bought him out at a high.

[farmaholic]

Re: Ass. Land Corp.... I wonder if any dots could be connected between the Brass there and the people/person who decides where CCP is going to invest taxpayer's contributions? As I said in a much earlier thread, I think CPP got to the party late!!! But why would they care? What percent of the "purchase" value of the land is the lease/rent? I also think the big run up on appreciation has petered out, so not much to gain there, maybe even lose some value.

[cottonpicken]

You could by stock in raytheon and make alot of money,but how the hell do you sleep at night?

[Hopperbin]

Management costs at cpp has tripled in a few short years. Its a problem. Are they doing things correctly? Do they care? I am sure any management there is not relying on cpp for their retirement ironically.