More government numbers seem to indicate the economy is cooling. New unemployment claims shot up last week. Retailers report shoppers are becoming more cautious. Some of that mood is attributable to higher energy costs.
Federal reserve Chairman Greenspan has suggested higher energy costs may be slowing the economy, much like Fed interest rates hikes. The fact is higher energy prices, like the cost of capital, are hard to pass on to the consumer. So producers and manufacturers either eat the additional production expense, or reduce production. But reducing production is not an easily deployed option for many in agriculture. Once planted, farmers are pretty much committed to harvest no matter the fuel cost or market prospects. That is the position in which many in farm country find themselves this week.
In the soggy Corn Belt the corn has emerged, but the condition of the crop has deteriorated from the cool wet weather. The weather has also slowed the conclusion of soybean planting. Eighty percent of what could be a massive soy crop is in the ground. At 88 percent cotton planting is a bit ahead of schedule.