Leading the Agricultural Revolution

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To the Editor:

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Interesting article, based on the thesis that agriculture needs to change because we are running out of resources (“Solving the Food Crisis,” Cover Story, July 29). It seems like Local Bounti and AquaBounty Technologies are at the forefront of an agricultural revolution. The question is, will they be cost-competitive? Both companies seem to produce food with less natural resources and lower environmental impact. As with AquaBounty, Local Bounti talks about proprietary tech, creating a distinct product category and branding. They talk about high future margins, but if they cannot produce the product for less than traditional methods, they will be confined to the premium-food niche.

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Recently, it seems like a lot of my grocery bag has been filled with products trucked in from Mexico. It would be interesting to know if Local Bounti is/will be cost-competitive with traditional growers in the Central Valley, Calif., Arizona, and south of the border.

David Parikh, On Barrons.com

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To the Editor:

Deere is the global leader in agricultural equipment. With an exemplary management committed to research and development, plus returning copious amounts of cash back to shareholders through dividends and buybacks, this is a name to own for the long haul.

Chris Bentsen, On Barrons.com

The Golden State

To the Editor:

Lauren Foster’s article nicely demonstrated how farmland can diversify a portfolio and protect against inflation (“Farmland Is an Inflation Hedge. How to Invest,” July 29). It did not discuss California agriculture as a separate issue. Most California agricultural land is used for trees and vines. This makes most of the acquisition cost a depreciable asset. Legally, trees and vines depreciate on a seven-year schedule. Coupled with bonus depreciation, this greatly increases worth, as depreciation is valuable because of high state taxes and the recent loss of the state and local, or SALT, deduction. Foster gives $3,380 per acre as the average value for American farmland, as of 2021. California farmland with adequate water, trees, and vines fetches 10 times that price.

Claude O. Burdick, Livermore, Calif.

Caveat Emptor

To the Editor:

Collier Securities’ Mark Grant’s focus on providing retirees with income that more than keeps pace with inflation is a noble goal (“10 Funds That Beat Inflation and Offer Steady Monthly Income,” Up & Down Wall Street, July 29). However, retirees who follow his advice should keep a large bottle of Alka-Seltzer at hand.

Every one of these funds uses massive leverage, from “as low” as 32% for Pimco Income Strategy Fund II to as high as 48% for Virtus Convertible & Income and Virtus Convertible & Income Fund II.

Risk-averse retirees, caveat emptor.

Harvey Rosen, Brooklyn, NY

Arthur Burns

To the Editor:

Reading “How the Fed’s Response to Inflation Now Can Avert a 1970s-Style Crisis” (The Back Story, July 27), I realize how deep the Paul Volcker myth is at the expense of the true Federal Reserve pioneer, Arthur Burns

Yes, Burns, like just about all Fed chairmen, succumbed to fatal presidential political pressures—for him, from Richard Nixon and Jimmy Carter. But under a rare economics-savvy, nation-before-politics Gerald Ford, Burns pioneered the dual mandate and initiated a then-radical money tightening that dropped inflation an astounding five percentage points in two years. The press’ focus on Whip Inflation Now overlooked the serious, effective Ford-era monetary policy. Carter forced Burns to reverse course, a money-printing policy that was continued by Volcker under Carter until the day Ronald Reagan was elected.

Noting how Jerome Powell bowed to Donald Trump’s pressure to drop interest rates in a good economy in 2018, the fact is that the Fed is rarely independent.

A really damning fact against the Fed is its overuse of quantitative easing, which depressed interest rates and prevented fixed-income investors from keeping ahead of inflation. It was almost like a reimposition of Regulation Q, which Carter eventually killed around 1979, but which capped the rates that banks could pay on deposits at 5%.

Robert Messman, Denver

Gas and Nuclear Power

To the Editor:

In “NextEra and 5 Other Utility Stocks That Offer Safety and Growth Now” (July 27), Al Root states, “But they can earn more off capital projects…and operating expenses drop because the wind and sun are free.” This is reminiscent of the German Green Party 20 years ago assuring Germans that utility costs would drop dramatically because the wind and sun are free.

Of course, just the opposite happened. Germany, along with other euro-zone countries piling into renewables, saw their electricity costs soar in direct relation to the installed solar- and wind-generation capacity. They still needed to maintain and operate fossil-fuel plants to back up the intermittent renewable generators. If battery storage becomes available, it will be extremely expensive.

Since utilities earn revenue off all capital projects, why not build reliable, inexpensive, clean gas generation or, better yet, a nuclear power plant?

Edward Bohn, Seahurst, Wash.

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