The New Year is upon us and it’s time to look at what we can expect for 2004. It has been great to be away from an airplane for three weeks, but this week I will be in North and South Dakota and out in California.

• The recent mad cow outbreak was only a matter of time in coming. As detection systems get getter here in this country and worldwide, we will see more cases. Its impact on the beef market will be determined by the number of new outbreaks and competition from other media events, like Kobe Bryant, Michael Jackson, terrorists, and the war in Iraq. Expect beef prices to be down about 15 percent.

• Interest rates could creep up in 2004, but they are highly dependent upon the strength of the economy and the inflation rate. The federal deficit and America’s dependence on foreign capital will be pivotal in the direction of change of interest rates.

• Expect land values and cash rents to continue to be strong but level out in 2004. Interest rate increases above 1 percent or 100 basis points could cool the real estate market.

• The Dow and NASDAQ are above 10,000 and 2,000, respectively. The market has a high probability of not having the accumulated gains it had in 2003. Any adversity will lower the Dow by 400 to 600 points. Expect stocks to do well early in the year, and then level slightly down later in 2004.

• The dollar will continue to weaken, which is good for exports in agriculture. A shaky economy later in the year could have an impact

With this being said, how do you plan for 2004?

• Know your cost of production.
  

• Have a sound, thought-out risk management program

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• Know your interest rate and energy cost vulnerability and take appropriate actions.

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• Save 5 percent of your net income.

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• Read three good books and get 20 percent of your learning outside of agriculture.

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• Identify three positive experiences and people that will uplift you.

Happy New Year!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

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