According to government numbers, consumer spending, factory orders and general economic activity are waning. But many on Wall Street believe the Bush tax cuts will work. Certainly equity markets have enjoyed an encouraging week. Some market analysts insist the week-long rally is a precursor to "capital formation" that will lead to investment in economic expansion and jumpstart the economy.
Certainly, low interest rates continue to encourage consumers to buy or refinance homes. But
that may be more a defensive consumer response than investor confidence. The broader economy remains in caution mode, and deflation remains a worry.
No one understands deflation better than those involved in American agriculture. Commodity prices remain historically flat. Foreign competition is greater, and the cost of production, despite advances in technology and science, has not gone down appreciatively. It is a scenario that is inexorably exacting a toll.
A Kansas-based trade group representing the nation's custom cutters says its membership has dropped by 15 percent. Officials say many custom harvesters quit the business following last year's drought … and those that remain still face financial hardship.
Even so, a spokesman for the Kansas Wheat Growers Association says there should NOT be a shortage of custom cutters for the state's wheat farmers. That's because harvest machinery continues to get larger … and the Kansas crop at 388-million acres remains smaller than in its peak years.
Nationwide, 55 percent of the winter wheat crop is rated in good to excellent condition. Wet spring weather as slowed the maturing of the crop in some areas.
The nation's other major row crops are virtually on pace. Eighty-eight percent of the corn crop is in the ground … 50 percent of the soybean crop has been planted … and 70 percent of the nation's cotton crop has been seeded.