The fields were flooded between Dawson and Perry, Iowa.
Spam sales are probably an inverse measure of economic health. The higher the sales of cheap, potted meat the more dismal the economy.
So it’s not good news that Spam sales are up 10 percent, reports Hormel Foods, even though the company recently increased the price of their canned pork shoulder by ten percent. A Hormel spokesman reported “very robust sales” of Spam, because “consumers in this environment are still seeing those as excellent values versus some of their alternative meal options.”
Hmmmmm. Meanwhile, the floods in the Midwest have yanked the emergency brake on the rural economy there. A bridge over the Cedar River has collapsed and cut a Burlington Northern railroad line. Tyson Foods is temporarily shutting down work at two Iowa hog slaughtering plants. Deere & Co. was forced to evacuate its Iowa plant.
Surprisingly, the Yonder 40 — 40 stocks that reflect the rural economy — is still doing considerably better than the other major stock indexes. The Yonder 40 is down less than a point since last July 1. The Dow Industrials are off by nearly 6 percent and the Standard & Poor 500 is down by 9.5 percent in the last eleven months.
Last week, however, several Yonder 40 stocks were hit hard. Banking stocks (Regions Financial and Southwest Bancorp) were both down sharply after a report speculated that banks would be cutting dividends and raising more capital. Lee Enterprises dropped nearly 16 percent as newspapers reported low advertising revenues. Skywest was off by nearly 11 percent as airlines suffered increasing fuel costs.
The big economic news in rural America, however, came from the Midwestern floods. Wet fields have kept farmers from planting corn, pushing the prices for the grain to over $7 a bushel, a record. That has cut into profits at corn-fueld ethanol plants. Shares of VeraSun Energy of Brookings, SD, have dropped 14 percent in the last week. At least five ethanol plants have shut down recently and one analyst said this was the “tip of the iceberg.” The Iowa Renewable Fuels Association said Friday that 300 million gallons a year of ethanol production had been forced off line.
The Midwestern economy had been humming along, powered by the world-wide demand for ag commodities. Housing prices had been holding up. But, now…. “It certainly puts a damper on that star, there’s no doubt about that,” said Ernest Goss, a widely followed regional economist at Creighton University, in Omaha, Nebraska, told the Wall Street Journal. The “impacts, I think, will be fairly significant.”
The full results for the Yonder 40, for the week ending June 13, are below:
|Yonder 40||Ticker||Price June 13||Price Change 6/6 to 6/13||Percent Change 6/6 to 6/13|
|Burlington Northern Santa Fe Corp.||BNI||104.68||-$5.72||-5.5%|
|Peabody Energy Corp.||BTU||77.59||-$0.15||-0.2%|
|ConAgra Foods Inc.||CAG||22.82||-$0.47||-2.1%|
|Cato Corp. Cl A||CTR||16.3||$0.47||2.9%|
|Deere & Co.||DE||77.92||-$3.39||-4.4%|
|Dean Foods Co.||DF||20.27||-$0.41||-2.0%|
|Family Dollar Stores Inc.||FDO||21.59||-$0.61||-2.8%|
|Fleetwood Enterprises Inc.||FLE||4.04||$0.09||2.2%|
|Gaylord Entertainment Co.||GET||25.26||-$1.21||-4.8%|
|International Speedway Corp.||ISCA||43.85||$0.50||1.1%|
|Mohawk Industries Inc.||MHK||70.16||-$1.94||-2.8%|
|Mine Safety Appliances Co.||MSA||41.67||-$0.33||-0.8%|
|Plum Creek Timber REIT||PCL||46.67||$0.59||1.3%|
|Penn Virginia Corp.||PVA||66||-$1.60||-2.4%|
|Regions Financial Corp.||RF||13.28||-$2.17||-16.3%|
|Sturm Ruger & Co.||RGR||7.39||-$0.06||-0.8%|
|Stage Stores Inc.||SSI||13.54||-$0.21||-1.6%|
|Tractor Supply Co.||TSCO||32.35||-$0.97||-3.0%|
|Waddell & Reed Financial Inc.||WDR||37.08||$1.51||4.1%|