As farmers move into processing with ethanol plants to capture more value, processors may be moving "downchain" to secure commodity supplies. One indication of this business model is showing up in California.
In another new twist, Correia said processors were willing to pay $10,000 to $12,000 per acre for land, regardless of what it has on it, and plant it to tree fruit. Processors, he explained, are consolidating to withstand the pressure they face from retailers.For farmers with low-value crops like corn, this strategy is pretty obvious. For processors of high-value crops (tree fruit) it also makes sense. Walmart has changed the game for all of us. Giant retailers breed in response giant suppliers who trigger the formation of giant farms.
The result is fewer, welded links in the old food chain.