Thursday, October 23, 2008

Economic slowdown comes to farm country

"The Farm Belt, one of the hottest parts of the U.S. economy in recent years, is rapidly cooling," Scott Kilman reports in The Wall Street Journal this morning. Crop prices are down, production costs remain high and fertilizer and seed costs could rise as much as 40 percent by planting time next spring, and "Stock prices of agricultural companies have plummeted."

"Most economists figure the Farm Belt can weather a slowdown, partly because farmer balance sheets are strong, and partly because federal mandates will increase the amount of corn consumed to make ethanol fuel next year," Kilman writes. "Also, economists think global demand for U.S. crops will remain robust despite recent economic troubles. Still, U.S. growers clearly face a riskier, more volatile environment in which to make bets on what to grow and how much." (Read more)

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