Newport: Be Frugal, My Friends

By: Alan Newport, editor of Drovers/CattleNetwork

We’re told again and again that the economy is “improving” or “heating up,” and yet all the data that’s not cooked or spun by the government says the opposite.
 
I believe the lesson here is we must be frugal, and we must change our cost structures to be lowcost producers. This is an old saw but a true one.
 
Here are a few facts for you to consider.
 
Diesel fuel is now below $2 per gallon. Together with the Cass Freight Index showing truck freighting levels falling below the tepid “recovery” years of 2010 and 2011, this says there is a real decline in trucking in this country. Consider that alongside other economic indicators like classically recession-predicting low prices for copper, aluminum and steel, and the extremely low Baltic Dry Index for shipping levels and prices.
 
Economist David Stockman keeps sounding the alarm on nefarious jobs reports, which are rigged to count any job of any type, thereby hiding the fact that good-paying, full-time jobs have been in decline for dozens of years, and since 2007, the only categories that have increased are part-timers and government-funded health-care system managers. Dig around in Stockman’s web page at davidstockmanscontracorner.com.
 
All this and more bodes a food market where “value” becomes more important to strapped consumers, and beef loses even more market share.

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