Haven't been watching these reports much this year, but just took a peek at what I think is last week's weekly blurb, and DAMN! ---------------------------- SIGNPOSTS OF CHANGE Turmoil in the markets is almost becoming a permanent condition. Learning to live with volatility and unpredictability is almost routine. Trying to make sense out of the numbers is impossible and developing a rational strategy for an irrational world is frustrating and non-productive. The next couple of years will challenge the most skilled operators and the list of obstacles threatening profitability seems always to get longer. The headliner is energy costs. Oil continues the march higher, with the cost of fuel dictating both product costs and production breakevens. The road to recovery for getting a handle on those cost and delivering affordable food must start with lower energy cost. While some believe oil will continue higher, behind the scenes changes are occurring rapidly and those changes will alter the direction of fuel prices and there are early signs the high fuel costs may not be unalterable. Consumers are switching to more efficient fuel friendly vehicles and abandoning gas guzzling SUVs. Electric vehicles will dominate future sales. Public transportation will find more use. Feed costs is the next hurtle to overcome and today’s high prices will find increased activity on the nation’s farms as farmers respond to price incentives present in today’s marketplace. Some cooperation from Mother Nature will be required but all out production will be the order of the day. Basis levels for corn will decline with lower fuel costs allowing truckers to correct pricing gaps and imperfections between surplus corn areas and deficit areas. Signs of economic slowdown are now reported daily. Housing starts have plummeted, layoffs in the workplace are becoming common. High interest rates will now impact agricultural land values that many thought immune to decline. A new realism will enter the picture for land values driven by forecast for lower crop values and higher land carry costs because of interest rates. The reality of a sharply smaller U.S. cattle herd will challenge beef producers with the task of delivering affordable food into a recessionary economy. The cash flush consumer of the past two years will be gone along with the sources of the handouts as Congress changes hands from Democrats to Republicans. The promise of returning to free markets unencumbered by government interference holds the hope for a return to affordable food." ---------------------------------------------- Talk about a political opinion on inflationary causes! Whoop!