Something has got to give

The National Restaurant Association predicts 4.4% growth for 2008, while other economists are calling a recession likely next year. I don't think both scenarios are possible, so it will be interesting to see which prognostication is closer to the mark. Talking yesterday to Bob Young, economist with the American Farm Bureau Federation, he said agriculture broadly benefits from the weak dollar. For example, combined U.S. apple, pear and stone fruit exports have been up about 15% from January though October this year. Grain commodities benefits from several factors aside from the weak U.S. dollar. Improving economic conditions in Asia are creating a rare period of "demand pull" for U.S. agricultural products, and fund managers are hedging inflationary pressures on the stock market by speculating in the futures markets for corn, wheat and soybeans. Biofuel adds to the pitched demand for corn. All in all, it is an intoxicating brew for U.S. agriculture now, but it certainly appears the broader economy is walking on eggshells as we head into 2008.