The Road Warrior of Agriculture
Bewitching Fall Quarter
Many of you are gearing up or are already into harvest and will be spending many hours away from the television, Internet or radio. While the grain is flowing into the bins, paper wealth is being dissolved in the equity markets.
Historically, September and October have been poor performance months for equity markets. Investment indexes have averaged a negative return for the month of September. October is usually known as crash month where major down turns occurs.
Watch the months of November and December. If unemployment continues to increase dramatically, particularly in higher paying jobs, expect sales for retailers to head south. The holidays are retailers biggest season. This year expect them to be in for a large slump, putting us into the beginnings of a recession.
I recently was at a classic car sale in the Midwest. Classic muscle car values are down 20% from a year ago. I expect this trend to move to the urban real estate and development sector. Farm real estate may hold values as investors seek refuge from an uncertain global equities market.
Another Sign of the Times?
My research assistant, Barbzilla, has a husband that builds staircases. He says he knows things are bad. Builders are using cheaper materials in new houses and looking for any shortcut they can find. If you are building a new home, composite baseboard is not a bad thing. But don’t overlook the quality of windows and doors. Just because they’re a name brand doesn’t mean you have a good window or door. Another problem is not what your contract includes, but what it doesn’t include. Read your contract thoroughly.
Air Travel Lately
I was on a plane again this week, trying to make my way to Kansas City for the Future of Agriculture Task Force being held there. Planes were half full with no business travelers. I, like a lot of other people, am giving more thought to video conferencing using the latest technology and satellite linkups.
It was fun being with the Big Red Huskiers as they defeated Notre Dame. Now watch Fresno State. They have been impressive early on. The Virginia Tech Hokies won this week, trying to fill the gap left by Lee Suggs. I know the forecast has to change a bit without Suggs in the game. We shall see.
Next week I will be reporting back from California; and another airplane adventure!
It is looking like a recession. Do you know where your money is?
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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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