Stocks Drop: Is Ag Economy at Risk?

November 12, 2018 03:42 PM

The U.S. stock market starting the week in a free fall. The Dow Jones Industrial Average dropping some 600 points Monday. Both the S&P 500 and Nasdaq Composite Index declining significantly as well. Crude oil prices are down and the dollar index is on the rise along with interest rates. 

"Are we you know are we going to see a recession?" asks Tyne Morgan in a recent interview with University of Missouri Agricultural Economist Scott Brown at the Farm Journal's MILK Business Conference.

"I don't see too many signs yet that make me too concerned here in the very short run," says Brown. "In fact, we continue to see unemployment rates at the lowest levels in decades." 

Brown, the director of strategic partnerships for the University of Missouri's College of Agriculture, Food and Natural Resources (CAFNR) says wage growth is also on the rise.

"Whether wage rates can continue to expand as we move forward I think is a little less important than just getting continued increases in job numbers," says Brown. "I think that is going to be super important to continue into 2019."

Brown says from an agricultural perspective there are several "canaries" to be watching.  

"I think number one you can look at beef," says Brown. "All of a sudden if consumers start buying [less] because they have less money in their pockets that could be really harmful to the beef industry."

Brown that's especially true as long as supplies remain large. Pork is in a similar position. 

"We do not need a domestic economy that slows down when we want to move record amounts of pork potentially to these domestic markets," says Brown. "It seems like with beef and with pork it's been the domestic markets that have been so strong [in helping] prices."

Brown says that need to continue in order for protein prices to remain at current levels. 

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Spell Check

Small, KS
11/13/2018 01:33 PM

  Hey PJ if you look at the amount of money that the US treasury takes in after tax cuts, you will see that there is more money coming in after the cuts. The reason for all the problems is that the politicians increase their spending more because they see more revenue. The problem with the tax cuts is that they do not decrease their spending. I've never worked for a poor person before and I sure and HELL don't want to work for a socialist government, but it seems like more and more of you do. I use to work for a Large City before returning to farming. The waste that government has will astound you. That was for a city, now imagine on the federal level. If people have more money they will spend it. If the government has money they pad their pockets and spend even more money than they receive. They gotta keep the votes coming. We need term limits in the worse way. The drain on the economy is to take away from those that work, and to give to those that are to lazy to work. I know lots of wealthy people that use to work 3 to 4 jobs. They had a desire to become better. You can't make that desire by giving it to them.

PJ Jahn
Ptown, IL
11/13/2018 11:24 AM

  There is for sure smoke on the economic horizon for several real reasons. But the "Trump VooDoo Economics Tax Cut Policy" will be the economic demise that will hurt the economy the most. Every previous VDETP has always produced following economic recessions. The last one was all so too close as to being a total economic meltdown. Such as Depression!!! Trump's VooDoo Economics tax cut policy will run out of positive economic results very quickly. this being due to the fact that all of the largest beneficiaries needed none, and those who reaped the least of benefits, needed it the most. A old friend was afraid of this exactly when Trump first talked of his tax cut policy, and Trump not even being elected yet. And the negative results to follow. The state of our economy was not in the condition to warrant tax cuts, but just the opposite as almost all of newly generated wealth in the previous years had gone to the very, very top, and wealthiest people. My friend had called all the previous recessions due to VooDoo economics tax cuts, spot on!!! Even Alan Greenspan as head of the Federal Reserve, warned of the VooDoo Tax Cut policy G. W. Bush proposed, that it should only be in effect until it becomes a drain on the Federal Treasury!!! Then it should be rescinded immediately!!! How did that work out??? No dice!!! Once again, good luck with that!!! It didn't take but 17 months to turn into a total, and absolute drain on the Federal Treasury!!! So, it will happen again, and then we will hear the BS , lies, and false blames!!! My uncle said of Reagans VooDoo Economics tax cuts, "Ive never seen anyone earn a living off of tax cuts, but I've seen a lot of people prosper, and earn a good living in a good, strong economy!!!!!!!!!!!! Reagan's policies blew the economy up 3 times in total. G. H. Bush got hung with the 3rd Reagan recession!!! How ironic is that, as it was G.H. Bush who coined the tag, "Reagan's VooDoo Economics"!!!!!!!!! So again, "It is what it is".

Small town, KS
11/12/2018 06:48 PM

  Not meaning to be pessimist, but everyone talks strong economy and high rates of employment, but people must buy food and clothing and much for the economy, but employment numbers are strong because most people are working two jobs. Neither bode well for a strong economy statistic.


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