Hello, I'm Mark Pearson. The malls are busy these days but there were new signs this week that consumers are tightening their belts.
**While the government reports that the overall economy, as measured by gross domestic product, roared ahead at an annual rate of nearly four percent during the summer and fall, the pace is slowing dramatically in the 4th quarter.
According to the Commerce Department, **consumer spending edged up just 0.2 percent in October -- -- its weakest showing in four months. Since consumer spending accounts for two-thirds of all domestic economic activity economists monitor it closely, **and late this week Federal Reserve Chairman Ben Bernanke said the central bank is prepared to cut interest rates further if necessary to keep the country from slipping into a recession.
**For the most part, Wall Street ignored most of the bearish reports and the notion of a looming rate cut helped the Dow add a little more than 350 points for the week.
Lower interest rates also will be welcomed in rural America where farmers already are enjoying favorable prices and bumper crops.
Many grain producers don't have much to complain about this year. They have bumper crops and are receiving relatively high prices.
Official crop numbers won't come out until January but the USDA estimates the U.S. corn crop at a record 13.2 (B) billion bushels ... up 25 percent from a year ago.
Many states have set records.
Historically, large harvests have meant depressed prices. But with the booming demand for corn for ethanol production, farmers are receiving $3.40 to $3.60 per bushel at the elevator. This time last year, corn growers were getting $2.20 to $2.40 per bushel.
Slug soybean harvest
With farmers converting more acreage to corn, it is no surprise soybeans production was down. USDA estimates farmers harvested 2.6 billion bushels of soybeans ... down from last year's 3 billion bushel crop. With the customary use as feed plus the growing biofuels market, demand for beans has prices hovering around $10 on the cash market.
Strong prices are not just due to demand from the domestic biofuels industry, but also to foreign buyers. Overall, USDA says rising prices for corn, beans and wheat should propel U.S. net farm income to a record $87.5 billion dollars this year. That's up nearly 50 percent from last year.
However, farmers may not want to celebrate too soon – as they also face rising costs of fuel, seed, fertilizer and other inputs.