Hello, I'm Mark Pearson. By many accounts it would seem the economy is floundering. The unemployment rate this week climbed to 6.1 percent, the highest level in 9 years. The Commerce department reports construction spending has slowed to its lowest level in four months. But, the Federal Reserve has decided to leave interest rates at their forty year lows, and has indicated a willingness to roll back rates to help get the economy moving again. It may be needed, companies have resisted new investment in equipment and are not expanding workforces.
Despite the apparently gloomy numbers, the nation's financial community sees things improving. Literally every stock index claimed robust gains this week as investors began to seek entry to the ground floor of what many analysts believe is an economic recovery.
In Rural America the economy is no less optimistic, but in recent days it has been tempered by a couple harsh realties – one seasonal, and the other totally unexpected.
The lone dark spot in the development of the nation's grain crops was literally above the Plaines this week. Summer storms continue to hamper winter wheat harvests in Texas and Oklahoma. Futures markets have not been alarmed by the delays. There is considerably more angst in the cattle futures pits.
Since the May 20 ban on imports of Canadian beef due to the discovery of Mad Cow disease in a single animal, traders have been anxious about what the discovery would do to domestic beef demand, and what lifting the ban would do to markets.
Despite the announcement American consumption has not ebbed. Indeed packers are actively buying U.S. beef. Cash cattle prices in the U.S. are at lucrative levels 8 to 10 dollars a hundred weight higher than futures prices.
Traders however are fully aware of the burgeoning supply of beef that is building in Canadian feedlots and they worry that lifting or even easing the ban on imports could decimate U.S. markets.