The Daily Yonder's coverage of rural economic issues, including workforce development and the future of work in rural America, is supported in part by Microsoft.
Residents of Tuscola, Illinois, gathered last week to hear the announcement of where the FutureGen power plant would be built.
Photo: Herald and Review
Mattoon, Illinois, learned last week that it will be home to a pollution-free coal power plant. The government and industry research group announced that it would build the FutureGen plant near the central Illinois town and not in Texas. At the same time, however, federal Department of Energy officials said soaring cost for the project — projections now top $1.8 billion — double original estimates.
Power generation — through wind, biofuels, nuclear power plants and conventional generating units — has become a prime economic engine of rural America. FutureGen is an experimental effort of 12 U.S. and foreign energy companies — including two members of the Yonder 40 stock index: Peabody Coal and the Southern Co.
The Yonder 40 consists of 40 publicly-traded companies that reflect the rural economy. In the last week, the 40 gained ground, the index rising 2.5 percent in value. The Yonder 40 rose more in the week ending December 21 than the Dow Industrials, the NASDAQ or the S&P 500.
The biggest news in the rural economy in the last week was the decision to pick Mattoon over Tuscola, Illinois, or either Odessa or Jewitt in Texas. “I know this is the biggest economic development opportunity for east-central Illinois in decades, so Merry Christmas, Mattoon,” said Illinois Governor Rod Blagojevich.
Residents of Tuscola were disappointed that the plant would be built near the town to the south, but were happy the project would be in Illinois instead of Texas. “I think it’s great for Illinois,” said Jeremy Leonard of Tuscola. “I’m really glad Illinois beat out Texas.”
Locally, the editorial page of the Journal Gazette and Times-Courier announced: “The welcome news immediately lifted the spirits of an area that’s taken a few economic hits in recent years. Now comes the unique chance to merge our needs to progress economically with the opportunity to showcase how future energy needs can be met with reduced pollution and more jobs….(T)he announcement Tuesday is a watershed. It is a once-in-a-lifetime day that is likely to leave a lasting, positive legacy on our region.”
FutureGen still has some hurdles ahead. Congress is upset by the rapidly escalating price of the venture. Congress gave the project $75 million this year, $33 million less than what the Bush administration had wanted.
On the day of the Mattoon announcement, the US Department of Energy warned that projected cost overruns involving the plant “require a reassessment of FutureGen’s design.”
There was other news affecting companies that do much of their business in rural America:
“¢ Gun sales are slow. And that’s pulling down stocks of gun makers and gun sellers, like Cabela’s. Various reasons have been given for the slowing sales of weaponry. Warmer weather gets part of the blame (deer are slower to move in warm weather; and warm weather makes meat preservation a problem). Also, it appears consumers are putting off discretionary purchases as they wonder about that is happening in the larger economy.
“¢ Vermont has opposed the sale of Verizon’s landline operations to Fairpoint Communications, a Yonder 40 member.
“¢ Coal prices in the U.S. have jumped 20 percent in the last three months due to increased demand from China and India. Higher demand in Asia for coal is leading to an increase in American coal exports to Europe.
Here are the results for the Yonder 40 for the week ending December 21, 2007:
|Companies||Ticker||Price December 21||Price Change for Week||Percent Change for Week|
|Burlington Northern Santa Fe Corp.||BNI||83.66||-$0.27||-0.3%|
|Peabody Energy Corp.||BTU||60.39||$0.39||0.7%|
|ConAgra Foods Inc.||CAG||24.14||-$1.02||-4.1%|
|Cato Corp. Cl A||CTR||16.15||$1.28||8.6%|
|Deere & Co.||DE||89.83||$2.67||3.1%|
|Dean Foods Co.||DF||26.55||$0.26||1.0%|
|Family Dollar Stores Inc.||FDO||19.48||$0.95||5.1%|
|Fleetwood Enterprises Inc.||FLE||6.74||$0.86||14.6%|
|Gaylord Entertainment Co.||GET||42.11||$3.36||8.7%|
|International Speedway Corp.||ISCA||41.73||$0.08||0.2%|
|Mohawk Industries Inc.||MHK||75.26||-$0.25||-0.3%|
|Mine Safety Appliances Co.||MSA||54.88||$3.12||6.0%|
|Plum Creek Timber REIT||PCL||47.1||$2.73||6.2%|
|Penn Virginia Corp.||PVA||44.69||$0.59||1.3%|
|Regions Financial Corp.||RF||24.4||$0.40||1.7%|
|Sturm Ruger & Co.||RGR||8.91||$0.63||7.6%|
|Stage Stores Inc.||SSI||15.55||-$0.17||-1.1%|
|Tractor Supply Co.||TSCO||37.61||$0.75||2.0%|
|Waddell & Reed Financial Inc.||WDR||36.51||$0.30||0.8%|