Chapter 212: To be a big landlord
When the Chinese have money, the first thing to do, of course, is to buy property. Look at 'Mao's line, Chinese, and net
Qi Zheng came to the United States this time to take advantage of the "wind" to rob and buy American farmland.
The purchase of American farmland is not to grow food, but to use the sun, land and water of the United States to alleviate the scarcity of forage in China!
On the one hand, the United States has now formed a very mature and developed agricultural industrialization system, especially grain production and trade, and several major international grain merchants headed by Cargill occupy an absolutely dominant position, and unless one of them is acquired, it will be difficult for the latecomers to come ahead; on the other hand, in the forage market, although the annual output of alfalfa grass in the United States accounts for more than one-third of the world's output, there is no big predator like the four major international grain merchants, but there is room for Jiagu to move around.
On the other hand, it is also forced by the domestic environment.
Last year, Document No. 1 emphasized "ensuring national food security" and began to promote the policy of direct grain subsidies nationwide. There is no subsidy for growing alfalfa grass, and the benefits are significantly lower than growing food. As a result, the area under alfalfa grass cultivation in the country has decreased dramatically.
At this time, there are still two years before the outbreak of the "poisoned milk powder" incident, but the addition of various so-called "thickeners" to milk is not new in the dairy industry - although Jiagu has not found any signs of melamine, it does not mean that it will not happen as expected in the future.
If Jiagu Dairy wants to survive the avalanche, or even go further in the crisis, it is urgent to expand the scale of its own farms.
Alfalfa grass is recognized worldwide as the best roughage for dairy cows. But in China, the limited arable land must first ensure the cultivation of grain - even if Jiagu owns its own land, it will give priority to growing grain, also because of efficiency.
Until Yang Ye, the person in charge of Jiagu Dairy, proposed to buy a farm in the United States and plant alfalfa grass in a large area to supply the country!
As soon as I heard it, even within Jiagu, there are many people who think it is a fantasy.
Not to mention whether there are legal obstacles for Chinese to buy land in the United States, and whether they can get the approval of the local authorities, the alfalfa grass grown will have to be transported thousands of miles to China, and I am afraid that the freight alone is sky-high.
However, after more than a year of detailed investigation and market research by the group's strategy department, it was found that this plan is feasible.
Legal obstacles are basically not a problem, as long as there is capital, there are ways to circumvent them.
As for the benefits, the Department of Strategy found that, first of all, the United States is cheaper. Growing alfalfa grass there has greater advantages than domestic, the most important of which is the low cost of land.
As for the cost of freight by sea, it is generally thought that it must be surprisingly high due to the long distance, but in fact, it is not the case at all. China exports a lot of goods to North America every year, but there are very few things imported from there, and the containers are often not filled when large cargo ships return to China, so the cost of forage shipping from the United States to China can be very low.
The cost of transporting a ton of alfalfa grass back to China is just over ten dollars, which is even cheaper than the freight between two places in China.
In this case, the expansion of self-built ranches has been put on the agenda, and it is imperative to buy land in the United States.
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Under Jiang Ping's leadership, the Assassin Fund methodically closed its positions to reap the profits, while Qi Zheng received news from Ding Xian, the Strategy Department, who had gone to the Midwest to inspect the farms, that there was a large pasture farm in Utah for sale.
The farm is located on the border between Utah and Colorado, backed by the National Dinosaur Fossil Park, about 300 miles from Salt Lake City. With about 200 milliliters of annual precipitation, the Green, the largest river in the western United States, encircles it on three sides along the farm's boundary, creating the best conditions for alfalfa grass to grow: an arid climate with easy irrigation.
How big is this large farm? It covers a full 100,000 acres (600,000 acres).
A farm of this size, even in a large country like the United States, is a giant farm.
This is not like the previous petty fights, if Jiagu can take this farm, he will become a big landowner in the United States.
Before Qi Zheng officially went to investigate, he first read some information passed on by Ding Xian.
Satellite images show dozens of giant circles of varying sizes scattered across the farm – one of the greatest inventions in the history of American agriculture: an efficient, powerful central irrigation system. This irrigation system has even transformed California's central canyon from a barren desert into fertile soil that supplies half of the fruits and nuts in the United States.
And after seeing the appearance of the farm with his own eyes, Qi Zheng was even more satisfied.
The 50,000-acre alfalfa grass plant on the farm uses a water station to direct water from the Green River into a pipe connected to the irrigation ring, and a control center collects information such as air humidity and precipitation to issue corresponding irrigation instructions, and can monitor the growth of forage grass in real time.
After the forage is mature, harvesting, drying and baling are all mechanized. With a high degree of automation and mechanization, the entire farm can be kept in order with just fifteen workers and one administrative staff – a farm of the same size needs at least a few hundred employees in the country.
"The gap between China's modern agriculture and the United States is a hundred years!" Ding Xian, who came to answer, sighed with a slight exaggeration.
Qi Zheng was noncommittal: "If we take this farm, we should keep the original staff as much as possible, and at the same time send a few employees from China to learn how to run a large farm." ”
Skipping this topic, Ding Xian continued to introduce to Qi Zheng: "In my opinion, this is a very good deal. In addition to the large area of irrigated land where alfalfa can be grown, the remaining hilly land can also be used for grazing and planting fruit trees. In addition, it includes facilities such as sprinklers, tractors, automobiles, combine harvesters, alfalfa balers and maintenance workshops, as well as several residential ......"
"The most important thing is that the farm has 80 cubic feet per second of water rights on the Green River in Utah, which basically ensures that the farm can be harvested in times of drought and flood!"
Qi Zheng nodded again and again, this is indeed very crucial.
Many people in China plan to buy land in the United States, but they don't know that the most important thing for agricultural land is to see if the land has water rights, and if there is no water right, it is equivalent to a piece of waste land.
In the United States, the "right to water", that is, the right to use (or ownership) the amount of water, is not uniformly regulated in the eastern and western states of the United States, some states stipulate that it is owned by the state, and some states stipulate that it is associated with privately owned land, and the person who owns the land enjoys the "right to water" accordingly. It can be inherited, sold and transferred for a fee, and in some places it can also be deposited in a "water bank".
Without the "right to water", farms cannot be diverted for irrigation – the use of groundwater is prone to both salinization and shortage.
Whoever buys which piece of land in Utah has the corresponding water rights, and no individual or unit can use it in exceedance. The water rights of this farm are obviously very valuable.
"A U.S. bank valued the farm's 80 cubic foot-second water rights on the Green River at $1.8 billion, while a third-party agency valued the deal at only $300 million. Ding Xian said.
Qi Zheng looked around, bowed his head, and then asked, "Why did the original farmer sell this farm?"
"In order to repay the bank loan!" Ding Xian shrugged, "This farm belongs to the family inheritance, and it is an inconspicuous piece of the farmer's assets......
Qi Zheng was stunned, in this way, the farmer really had a fate with him—although it was a bad fate.
"So, the farmer is also one of the victims of Hurricane Katrina?" Qi Zheng asked with a faint smile.
"Isn't it? It's miserable! It's going to go bankrupt, so I'm going to sell the farm. Ding Xian naturally knew that the group's hedge funds benefited greatly from the disaster of Hurricane Katrina, and in a sense, it was the loss of a refinery like a farmer that helped Jiagu make huge profits.
"If the farmer knew that the money we used to buy the farm was obtained from speculation in the hurricane disaster, would he have shot us down?" Qi Zheng joked.
"It's okay to be unhappy, but it's not okay to turn your face. Ding Xian said with a smile.
Qi Zheng smiled but said nothing.
Not necessarily, if he knew about my black hand under it, he probably cut my heart alive.
"It's rare to see a full farm of this size, so there are a lot of people who are interested in this farm, and there are quite a lot of competitors. Ding Xian said while analyzing the intelligence.
"What's the strategy?" Qi Zheng asked casually.
Unexpectedly, Ding Xian said without hesitation: "It's very simple! Just throw cash!"
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