WARNING: Idaho Farmers Face an Economic Mugging
A caller told me the other day on-air that the next big inflation shock will be the cost of fertilizer. This morning, I received an unexpected email from an old friend. His family operates one of the largest apple orchards in America. Here is a quote from his message.
“You might look at the high cost of fertilizer for farmers this coming spring. Some say as high as $1.600.00 a ton if you can find it!!!!!!!!!!! Plus the cost of fuel for farm equipment. $10.00 apples up next?????????”
But GDP Looks Great, Right?
I would like to add a quick note about today’s “good” economic news. Gross domestic product growth was extremely healthy last year, capped by a robust figure at the end of the year. Biden-friendly news media will tell us he’s the “Comeback Kid” and that all will be well if we stay the course and allow him to borrow several trillion more dollars.
Don’t buy into the hype. This morning while driving to work I heard an economist explain the figures released are based on inventories bulging at the seams. He explained (on Coast-to-Coast) the real GPP number has become 1.9 percent, well below the average of the last 20 years
Farming Resembles the Book of Job
After suffering through drought, you might expect Idaho farmers to feel a bit like Job this spring. Many are already operating on tight margins and now the cost of fertilizer means they’ll have few choices. Maybe only two. File for bankruptcy or demand more for the product. The latter may get stymied by businesses controlling processing. If you look at current sky-high beef prices, consider that local ranchers aren’t seeing an increase in income.
Silver Lining on the Way
On a positive note, we aren’t living through anything like the dustbowl days of the 1930s. A combination of environmental issues (drought) combined with crushing debt and an economy almost completely cratered. The latter isn’t likely anytime soon. There’s a huge gap between a periodic recession and the Great Depression. Still, life isn’t going to get any easier for a great many people anytime soon.
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