Tuesday, August 15, 2006

ITRO: The Uncontrollable Market

It is a common belief in America that we can “get things under control” if we really want to. This is the land of opportunity and we can beg for, work for, or otherwise manipulate success. In this country of rugged individualism and free thinking, we don’t like to think that we cannot control our fate. There is still one segment of the population that struggles to do just that, the American farmers.

Small American farms have nearly disappeared in our landscape. They have been taken over by larger corporate farms concentrated in certain areas, and the ever-expanding suburbia. No matter what size the farm, however, they are all affected by one of the last aspects of human society beyond our control: the weather. American producers are expected to show higher prices and lower yields this year due to a drought extending through the nation’s middle section, known as the “grain belt”. The drought is in its second year and all grain crops are expected to be effected, including cotton.

The drought is only one factor that has lead farmers into the red. Higher prices for fertilizer and oil have really hurt farmers. If you think your SUV takes a lot of gas to go down the road, imagine how much farmers are paying to fill up a tractor that is pulling heavy equipment and drive all day, every day, all summer! It costs more to plant and tend to the crops and it costs more to ship them. Guess what we put in those semis that haul the produce to market? Of course, the answer is fuel. From start to finish fuel has altered the American farmers’ economic state.

Finally fertilizer costs have increased as well. Some companies are finding ways to tap in on this highly specialized market. Itronics, Inc. (OTCBB: ITRO) manufactures fertilizer out of recycled photochemicals. Dr. John Whitney, CEO of Itronics, finally forecasted growth for his company. So far the major financial activity has been in investments, three thousand of which came recently from East Coast investors in order to double plant capacity to fulfill demand for the synthetic fertilizer. In light of this information, it seems that perhaps the ethanol gasoline supplement could be the next big thing in the farm market, and just the boost that the market needs.

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