Welcome to the 2003 tip-off of the Ag Globe Trotter. I’ve already been trotting the globe this year with trips to Minnesota, South Carolina, and even Washington. Here’s the good, bad, and the ugly for the 2003 season for agriculture, agribusiness, and the economy in general.
Good
o Low interest rates have an 80% probability of continuing in 2003, which is good for borrowers, but bad for investors.
o Low interest rates, government supports, and non-farm investments in farm ground will keep land values strong in many areas of the country.
o Government support will continue to bolster farm revenue and land values. But beware, this is a false expectation that can’t last forever.
o Water tables are being replenished in many of the drought areas. Some still suffer, however.
o Still, there are an increasing number of ag producers who are business- and strategy-oriented.
Bad
o For any of you sending children to college, colleges have increased tuition from 5% to 30%. Ouch!
o Insurance companies are requiring higher premiums and many people have more problems obtaining insurance.
o Medical coverage premiums are increasing. Some producers are paying as much as $1,000 per month, which is more than a house payment!
o Look for higher real estate taxes as state and local budgets attempt to generate revenue.
Ugly
o There is a possibility of war with Iraq that will become prolonged and break out in other areas of the world, disrupting trade and economies.
o The stock market and mutual funds have become a meat grinder. You put money in and the highly paid brokers just grind your principal away through fees.
o The food chain is consolidating rapidly. Power and control of a vital resource is dangerous.
o The general apathy about importing more food from third-world countries could be part of our long-term demise.
Sports Note
o Ohio State did outplay Miami, despite the questionable call. Congratulations to Jay Penick, who is a Buckeye graduate.
o Ouch to the Cougars. Sorry you lost your coach; I guess money talks.
o Michael Vick is fun to watch. He is more elusive than a 400-lb rogue steer calf! Hope he avoids the career-ending injury.
My e-mail address is:sullylab@vt.edu
Editors' note: Dave Kohl, 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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