Tuesday, November 14, 2006

I need something to wash this down

So, it goes to reason that if crop prices go up, that should be a good thing for agriculture. But a couple of news items this morning leave me wondering.

One story from Associated Press came from yesterday's earnings report from Tyson Foods. Tyson was reporting their third consecutive quarterly loss. The reason, in part, was blamed on higher corn prices. The chickens and cows that become the foods in Tyson Foods are costing more to feed, which is likely to mean it's going to cost consumers more to feed their families.

Why? Corn liquor. Or more accurately, corn fuel. Ethanol. Increased demand for ethanol is contributing to a 10-year high in price for corn.

But on the flip side of the supply-demand ledger, fewer people are eating meat. So, Tyson says it's paying more and selling less.

So while Midwest corn growers may be in hog heaven, cattle and poultry ranchers may not be quite so happy.

You know who is happy? The folks who do seem to be making money in the confusing economic morass are those on Wall Street. In a story broadcast this morning (click here for a link to the video on today.msnbc.com) on the Today show from CNBC, the five largest Wall Street firms alone will pay out $36 billion in bonuses this year, which would set a new record. The bonus bonanza is attributed to a robust and rejuvenated stock market. It will eclipse the record set in 2005 when $21.5 billion in bonus cash was awarded.

So, how many farmers and ranchers out there, who produce the raw materials for the American economy, are having all-time record grown when also absorbing higher fuel and fertilizer costs, higher wage costs and other rising expenses?

It's something to chew on.

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