Farming in 2004

March 16, 2004

In recent weeks I have been on the road speaking at major Ag events in Illinois and Nebraska. There is no question, the mood in the country is much improved over a year ago. Prices and politics both give us reason for optimism.

Prices almost across the board make me want to listen to the markets these days. Beef has held up in spite of Mad Cow. Hats off to the American consumer smart enough to know he or she has a better change of getting struck by lightening than getting Mad Cow disease. Port exports are up 15%. Unfortunately the bird flue is not doing the poultry business any favors. Still, with the Atkins diet in the middle of our plate, it does taste good. All ofthis means strong demand for beef, pork, poultry and grains and soybeans. Stocks are tight. Very tight.

The U.S. economy could easily grow at a 4% rate this year, fueling more consumer demand. The world market is also picking up steam. China with 1.3 billion people makes the market just like the Soviet Union did 25 years ago. In addition, although you may not like high gas prices that sure makes ethanol work. Turn to politics and I don't see the Congress taking a meat axe to farm program spending even with a big deficit... because this is an election year. Next year then perhaps will be some adjustment.

Keep in mind that since prices are improved, the farm program costs are down. They are down $l.8 billion below the earlier forecast. House Ag. Committee Goodlatte pointed out that "we're making our contribution to deal with the deficit."

It has been a long dry spell, but I am optimistic about 2004.

Until next week, I am John Block from Washington.