The U.S. economy is surging in the second quarter. Newly revised numbers from the Commerce Department are indicating the gross domestic product (GDP) of the United States increased 3.1 percent from April to June, the fastest growth rate in more than two years.
The U.S. stock markets are continuing to hold near or above all-time highs. Tommy Grisafi, branch broker with Advance Trading, Inc. says these macroeconomic moves are the opposite of what farmers are experiencing in grains.
“If you had told me President Trump was going to win and the stock market was going to go up as much as it did and never be volatile, I would have said no,” says Grisafi. “It’s not and the stock market is probably closing at record highs right now.”
Grasafi says that means 401(k)s are likely higher than a year ago for more Americans.
“You see it going up every day and you look at your farm and say, ‘How are we losing money?’” asks Grisafi. “You wish there was more balance where everyone was making money.”
He compares the stock market bull run to when farmers experienced $8 corn.
“The row crop guy was happy but then the dairies, the cattlemen, the chicken and hog [producers] said we can’t feed $8 corn to animals,” says Grisafi.
Following the major fires and flooding from hurricanes, Grisafi says there may be other challenges associated with an expanding job market and low unemployment.
“With the storms that happened in Florida and Texas, if anyone in America needs a job and has the ability or the traits needed, they’re going to be building there for years,” says Grisafi. “We’re at full employment and the people who aren’t working, there’s probably a good chance they don’t want to.”
Grisafi believes rising crude prices will also help support the overall U.S. economy.
“Growers made more money when their input costs were a little higher,” says Grisafi. “A $60 barrel of crude should get the pumps going [in North Dakota] again and create jobs up there again.”
Grisafi says crude has been trading relatively sideways for roughly the last year.
“A rising tide raises all ships and hopefully we’ll see something like here,” says Grisafi. “Maybe the rally that comes in grains is from overall energies increasing.”
