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Agriculture • Drought, cold cripple U.S. winter wheat crop – Western Kansa
By Roxana Hegeman
11 May 2013
(AP) – The winter wheat crop is expected to be far smaller this season compared to last, particularly for hard red varieties used in bread, the U.S. Department of Agriculture reported Friday.
In the first government projection on the harvest’s anticipated size, the National Agricultural Statistics Service estimated winter wheat production will be down 10 percent to 1.49 billion bushels, due to fewer acres — 32.7 million acres, some 6 percent fewer acres than a year ago — and a 1.8-bushel decrease in average yields, to 45.4 bushels per acre.
The government’s forecast comes amid a season marked by drought and late spring freezes in the Midwest’s major wheat growing areas, particularly in Kansas — the nation’s biggest wheat-producing state. […]
Nationwide production of hard red winter wheat, typically used to make bread, is expected to decline 23 percent to 768 million bushels. But that’ll be offset somewhat by soft red winter wheat types — favored for cookies and pastries — which are projected to be up 19 percent at 501 million bushels.
One bushel of wheat yields about 42 pounds of flour — enough to make 73 loaves of bread.
Far western Kansas is considered a disaster area, and farmers told tour participants earlier this month that crop insurance agents have already begun writing off acres there. Wheat tour participants examined 570 fields, finding that in south-central Kansas, which got late winter snowstorms and heavy spring rains, the wheat looks good and production there is expected to offset a bit the losses elsewhere in the state. [more]
http://www.desdemonadespair.net/2013/05 … wheat.html
Statistics: Posted by yoda — Wed May 15, 2013 1:45 pm
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Agriculture • Drought marches to the west
Drought marches to the west
Angela Bowman, Staff Writer | Updated: 05/09/2013
Drought Monitor map, released on May 9, 2013.
Rain and snow over the past several weeks have helped beat the drought into remission across much of the Corn Belt, but as 48 percent of the country remains in moderate or worse drought, more states brace for another year of drought.
In the thirsty heartland, in particular, some states are split between improving and worsening drought.
According to the latest Drought Monitor report, 23 percent of Kansas and 9 percent of Oklahoma remains under exceptional drought. The spread of this drought in both states has been doused with welcomed rain and even been eliminated in some eastern counties.
In the western half of these states, however, the Drought Monitor tells a different story. Rain bypassed western Oklahoma and Kansas, leaving these areas in extreme or worse drought.
Further to the west and south, however, the Drought Monitor paints a grim picture. Intense drought is returning to Texas, New Mexico and Colorado as it creeps its way further to the west. Conditions in New Mexico in particular have declined dramatically for the last month. In early April 4 percent of the state was in exceptional drought – this week that number stands at 40 percent.
However, residents in these parched states have turned the pressure of drought into a resurgence of faith. The Associated Press reports that the tension from three year of hot, dry weather has pushed more people to turn to religion. From Christian preachers and Catholic priests to American Indiana Tribes, more and more are turning to fair because, as active church member pointed, “praying can’t hurt.”
The impending drought in the west has also prompted officials in Oregon, a state better known for its wet weather, to warn that irrigation will likely have to be shut off to many of the 200 farms and ranches in the upper Klamath Basin.
http://www.cattlenetwork.com/cattle-new … 63661.html
Statistics: Posted by yoda — Thu May 09, 2013 9:39 am
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Agriculture • Is the Corn Belt drought over? Not yet
Is the Corn Belt drought over? Not yet
Angela Bowman, Staff Writer | Updated: 05/02/2013
Drought Monitor map released on May 2, 2013.
Spring rains helped some key agricultural states loosen the drought’s stranglehold, but with summer less than two months away, concern lingers.
The latest Drought Monitor report, released on Thursday, shows that 46.9 percent of the nation is in moderate or worse drought. This is slightly improved from last week’s 47.3 percent.
In the Corn Belt, where drought has persisted extensively since last fall, a surge of wetter weather systems have helped alleviate some of the drought’s pressure.
Nebraska, once cloaked with extensive drought, now shows signs of improving. Currently 77 percent is in extreme to exceptional drought, down considerably from 96 percent reported at the beginning of the year.
South Dakota has showed similar reprieve from the drought’s grasp with 21 percent reported in extreme drought, down from 29 percent last week.
Not all states are as lucky. Some – like Oklahoma and Kansas – are states split by drought. In areas were conditions are improving, primarily in the eastern half of both states, the end to the drought could be near. But for those where little relief is seen, conditions only continue to worsen.
In Oklahoma, 31 percent is in extreme drought, with the majority of this intense drought located in western areas of the Sooner State.
Colorado and Texas will soon be dominated the headlines as the drought deepens. Further to the west drought is also becoming a bigger story.
http://www.cattlenetwork.com/cattle-new … 28451.html
Statistics: Posted by yoda — Thu May 02, 2013 1:28 pm
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Agriculture • Cargill Down 42% YOY Due To Drought
Cargill’s earnings plunged 42% in 3rd quarter due to drought
Cargill Inc., the largest closely held company in the U.S., reported third-quarter earnings were $445 million, down 42% from the same period a year earlier.
By Ricardo Lopez
April 9, 2013, 10:48 a.m.
Last summer’s punishing drought in the Midwest caused Cargill’s third-quarter earnings to sink 42% compared to the same period a year earlier, the Minneapolis-based company said Tuesday.
Cargill Inc., the largest closely held company in the U.S., reported that net earnings in the fiscal 2013 third quarter were $445 million — down $321 million from the same period a year earlier.
Third-quarter sales were $32.2 billion — up 1%.
"In North America, our meat-processing businesses were pressured by the drought-related high cost of feed ingredients," said chief executive Greg Page.
Among Cargill’s five business segments — which include agriculture services and food ingredients and applications — four of them had lower earnings in the third quarter.
"The animal protein businesses were negatively affected in North America by high feeding costs, tight cattle supplies and an oversupplied turkey market," the Minneapolis-based company said in a statement.
Cargill is a multinational food and agriculture company employing 142,000 people in 65 countries.
http://www.latimes.com/business/money/l … 2787.story
Statistics: Posted by yoda — Tue Apr 09, 2013 1:43 pm
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Agriculture • Drought that ravaged US crops likely to worsen in 2013, for
Drought that ravaged US crops likely to worsen in 2013, forecast warns
Noaa predicts tough spring for already struggling farmers as growing demand for water leaves US more exposed dry seasons
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Thursday 21 March 2013 18.12 GMT
Hotter, drier conditions are predicted across much of the US, including parts of Texas, Oklahoma and Kansas. Photograph: John Sommers Ii/Reuters
The historic drought that laid waste to America’s grain and corn belt is unlikely to ease before the middle of this year, a government forecast warned on Thursday.
The annual spring outlook from the National Oceanic and Atmospheric Administration predicted hotter, drier conditions across much of the US, including parts of Texas, Oklahoma and Kansas, where farmers have been fighting to hang on to crops of winter wheat.
The three-month forecast noted an additional hazard, however, for the midwest: with heavy, late snows setting up conditions for flooding along the Red and Souris rivers in North Dakota.
"It’s a mixed bag of flooding, drought and warm weather," Laura Furgione, the deputy director of Noaa’s weather service told a conference call with reporters.
Last year produced the hottest year since record keeping began more than a century ago, with several weeks in a row of 100+degree days. It also brought drought to close to 65% of the country by summer’s end.
The cost of the drought is estimated at above $50bn, greater than the economic damage caused by hurricane Sandy
The drought area has now fallen back somewhat to 51% of the country. But even the heavy snowfalls some parts of the country have seen were not enough to recharge the soil, the Noaa scientists said.
The agency was forecasting above-normal temperatures in the south-west and other parts of the country, with only the Pacific north-west expected to experience below-normal temperatures.
It said drought conditions were likely to remain in the central and western parts of the country, and could expand in California, the south-west, the southern Rockies and Texas. The Florida panhandle should also anticipate drought conditions, according to the forecast.
Scientists warned of an increased risk of wildfires, because of the dry conditions, for parts of Minnesota and northern Iowa.
Other areas of the country however were in line for floods, with the most significant along the Red and Souris Rivers in North Dakota. Noaa said it was also expecting some 20,000 acres of farm land to be flooded in the Devil’s Lake area of North Dakota.
Some flooding was also expected along the upper Mississippi into southern Wisconsin, northern Missouri and parts of South Dakota and Iowa.
Meanwhile, a poor snowpack suggests the drought will persist in the Rocky Mountain states and California.
"The drought that we accumulated over the last five or six years in the middle part of the country and also the south-west is going to take a long time to remove," said Furgione. "The deficits in the soil and very unlarged, and it is very unlikely the seasonal mean precipitation will ameliorate that."
Farmers had been anticipating a poor start to the growing season, especially in the south-west and areas such as Texas, Oklahoma and Kansas, where the drought has not relaxed its grip.
Farmers in some areas did not even bother to plant winter wheat this year.
The prospect of another dry year caused concern along the Mississippi where low levels held up barge traffic last year. A coalition of mayors from towns along the river visited Washington this week to press for funds to keep the waterway open.
"If the river is shut out, that’s $300m a day that is affected by that in economic losses because you can not shift the traffic up and down the river," said Hyram Copeland, mayor of Vidalia, Louisiana.
Communities across the wheat and corn-growing areas, that took the brunt of last year’s drought, had been looking for heavy snows and rains this winter to prime the land for the next planting season.
"The bottom line is we need a big spring because we do not have the buffer or carryover we did coming into 2012," Mark Svoboda, a climatologist at the National Drought Mitigation Center, told a forum on Wednesday.
However, the forecast suggests that big spring will not materialise.
The scientists also note a growing demand for water – for cities, for agriculture – is leaving the country even more exposed to hotter, drier years like 2012.
"We have seen changes to our vulnerability to drought," Svoboda said. "More straws in the drink is putting more demand on a finite water resource."
http://www.guardian.co.uk/environment/2 … worse-2013
Statistics: Posted by yoda — Fri Mar 22, 2013 12:14 am
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Agriculture • South Texas drought taking its toll on cattle ranchers
South Texas drought taking its toll on cattle ranchers
AgriLife Extension Service | Updated: 03/21/2013
RIO GRANDE CITY – The unrelenting drought is taking its toll on South Texas cattle ranchers who are resorting to a centuries-old emergency method of feeding cattle, according to a Texas A&M AgriLife Extension Service agent.
“Ranchers down here commonly refer to it as ‘chamuscando,’ the Spanish word for the process of burning off spines from prickly pear cactus so cattle can eat the pods for food and water,” said Omar Montemayor, an AgriLife Extension agent in Starr County. “For many of our aging ranchers, chamuscando (pronounced chah-moos-KAHN-doh) and hauling hay and water to their livestock are last ditch efforts to stay in the cattle business.”
Burning cactus is a practice that dates back to the mid-1700s when Spanish settlers moved here from Mexico City and raised cattle for sustenance along both sides of the Rio Grande, Montemayor said. The pioneers burned cactus over mesquite fires, which eventually gave way to kerosene burners until the 1950s when ranchers switched to butane then propane.
“In times of drought, when pastures have no grass or hay for cattle to feed on, ranchers use a propane-fueled torch to burn the needles off nopal, or cactus. The pads or stems of the plant contain moisture and fiber, but very little protein. Ranchers supplement their cattle’s diets with protein pellets called range cubes.”
Chamuscando and hauling supplemental feed, hay and water to cattle are costly measures, Montemayor said, but for many South Texas ranchers, time may be too short to sell their herds now and rebuild if and when the drought breaks.
“Many of our ranchers are in their late 60s and 70s,” he said. “If they sell their cattle and the drought ends next year, they’ll have to buy young cattle back. If a rancher pays $2,400 for a ‘pair,’ a cow and a young calf, he or she will have to wait four to five years to sell four or five calves just to recoup their investment.
“For a lot of ranchers, that’s time they think they may not have, so they’re doing everything they can to keep their cattle alive now. But it’s hard work and very expensive.”
Once cattle start eating burned cactus, a rancher has to have a plentiful supply on hand.
“When ranchers burn cactus, they have to burn at least a two-day supply because cattle used to eating cactus will eat it with spines and all if the burned cactus runs out. That results in mouth injuries, they stop eating and now a rancher has a whole new set of problems.”
At an average cost of $3.50 per gallon of propane, a rancher with 30 head of cattle will spend about $35 per day just on the fuel to burn cactus, Montemayor said.
“Hopefully, a rancher has plenty of cactus on his ranch land. Then there’s the cost of the protein supplement. Some set out molasses tubs which help with the livestock’s hydration and digestive process.”
Thirsty cattle require lots of water, a commodity long since gone from many South Texas ranches.
“For ranchers without windmills or wells, there’s the cost of hauling water to these ranches where ponds have long ago dried up. Some of these ranchers have been hauling water to their ranches for two or three years. A lactating cow consumes about 20 gallons of water per day, so with 30 head, you’re talking about a lot of water daily. ”
Ranchers use all sorts of make-shift and customized tanks and trailers to haul untreated Rio Grande water from municipal water treatment plants to their ranches behind pickup trucks burning $4 per gallon diesel fuel. Cost of the water is relatively cheap, at about $10 for 500 gallons, but the trips are almost non-stop, Montemayor said.
“Once a drought starts drying up the natural resources of a ranch, expenses and efforts increase tremendously. Equipment gets more use which means added repairs and maintenance; the list just goes on and on.”
Ranchers have also been buying hay, available nearby in the lower counties of the Rio Grande Valley where fields have been irrigated. But that won’t last long either, he said.
“A round bale of hay is going for about $100, but as water districts start cutting back on the irrigation water that hay growers have had, hay will become more scarce and more expensive.”
Montemayor said a South Texas way of life going back more than 250 years is very much at risk.
“Our ranchers are not youngsters,” he said. “The expense and effort they have to put in is taking a terrible toll. With little or no rain since Hurricane Alex in 2009, and none in the forecast, we could be looking at the end of an era here. Ranchers, like farmers, are very optimistic, but how long can they hold out?”
http://www.cattlenetwork.com/cattle-new … 65431.html
Statistics: Posted by yoda — Thu Mar 21, 2013 10:19 am
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Agriculture • New Zealand’s Worst Drought in 30 Years May Cost NZ$2 Billio
New Zealand’s Worst Drought in 30 Years May Cost NZ$2 Billion
By Adam Haigh – Mar 16, 2013 6:25 PM MT
New Zealand’s most widespread drought in at least 30 years may cost NZ$2 billion ($1.7 billion) as dry conditions across the North Island threaten economic growth, the government estimates.
“The latest advice is that somewhere between $1 billion and $2 billion will be knocked off our national income, and as every week goes by, the prospect of it being $2 billion instead of $1 billion grows,” English said in an interview on TVNZ’s Q+A program. “We’ll be getting updated advice over the next few weeks from the Treasury as we prepare the forecasts for the next budget in the middle of May.”
Finance Minister Bill English warned last week the drought may curb economic expansion in the nation, where dairy exports of NZ$11.4 billion last year made up 25 percent of all merchandise shipments abroad. The central bank held the cash rate at a record low on March 14 and cited concerns the dry conditions may “substantially reduce economic output.”
Economists at Bank of New Zealand Ltd. have reduced projections for first-half economic growth to 1.1 percent from 1.3 percent because of the drought.
Fonterra Cooperative Group Ltd. (FCG), the world’s biggest dairy exporter that accounts for about 40 percent of the global trade in dairy products, said in a Feb. 27 statement that dry weather conditions in mid-December and January, particularly in the North Island, had resulted in a slowdown in milk supply growth. Drought was declared earlier this month in several North Island regions, including the largest dairying provinces.
Phil Rennie, a spokesman for the Minister for Primary Industries Nathan Guy, has said 2013 is the first time in at least three decades the entire island is suffering from drought.
http://www.bloomberg.com/news/2013-03-1 … llion.html
Statistics: Posted by yoda — Sun Mar 17, 2013 1:30 am
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Other • Consumer Spending Drought: 16 Signs That The Middle Class Is
Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money
By Michael, on February 28th, 2013 Is "discretionary income" rapidly becoming a thing of the past for most American families? Right now, there are a lot of signs that we are on the verge of a nightmarish consumer spending drought. Incomes are down, taxes are up, many large retail chains are deeply struggling because of the lack of customers, and at this point nearly a quarter of all Americans have more credit card debt than money in the bank. Considering the fact that consumer spending is such a large percentage of the U.S. economy, that is very bad news. How will we ever have a sustained economic recovery if consumers don’t have much money to spend? Well, the truth is that we aren’t ever going to have a sustained economic recovery. In fact, this debt-fueled bubble of false hope that we are experiencing right now is as good as things are going to get. Things are going to go downhill from here, and if you think that consumer spending is bad now, just wait until you see what happens over the next several years.
Even though the Dow is surging toward a record high right now, everyone knows that things are not good for the middle class. A recent quote from CPA Howard Dvorkin kind of summarizes our current state of affairs very nicely…
"The fact of the matter is that America is broke — whether it’s mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months’ of savings," Dvorkin says."If you talk to people, most don’t have two pennies."
These days most Americans are living from paycheck to paycheck, and thanks to rising prices and rising taxes, those paychecks are getting squeezed tighter and tighter. Many families have had to cut back on unnecessary expenses, and some families no longer have any discretionary income at all.
The following are 16 signs that the middle class is rapidly running out of money…
#1 According to one brand new survey, 24 percent of all Americans have more credit card debt than money in the bank.
#2 J.C. Penney was once an unstoppable retail powerhouse, but now J.C. Penney has just posted its lowest annual retail sales in more than 20 years…
J.C. Penney Co. (JCP) slid the most in more than three decades after the department-store chain lost $4.3 billion in sales in the first year of Chief Executive Officer Ron Johnson’s turnaround plan.
The shares fell 18 percent to $17.40 at 11:28 a.m. in New York after earlier declining 22 percent, the biggest intraday drop since at least 1980, according to data compiled by Bloomberg. J.C. Penney yesterday said its net loss in the quarter ended Feb. 2 widened to $552 million from $87 million a year earlier. The Plano, Texas-based retailer’s annual revenue slid 25 percent to $13 billion, the lowest since at least 1987.
How much worse can things get? At this point the decline has become so steep for J.C. Penney that Jim Cramer of CNBC is declaring that they are in "a true tailspin".
#3 In the United States today, a new car has become out of reach for most middle class Americans according to the 2013 Car Affordability Study…
Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.
The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales. According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year.
#4 The founder of Subway Restaurants, Fred Deluca, says that the recent tax increases are having a noticeable impact on his business…
"The payroll tax is affecting sales. It’s causing sales declines," he said, estimating a decline of about 2 percentage points off sales at his restaurants. "There are a lot of pressures on consumers," Deluca said, adding "I think this is on the permanent side, but I think business will adjust to it."
#5 Many other large restaurant chains are also struggling in this tough economic environment…
Darden Restaurants, which owns the casual dining chains Oliver Garden, LongHorn Steakhouse and Red Lobster, said blended same-store sales at its three eateries would be 4.5 percent lower during its fiscal third quarter.
Clarence Otis, Darden’s chairman and chief executive, said that "while results midway through the third quarter were encouraging, there were difficult macro-economic headwinds during the last month of the quarter."
"Two of the most prominent were increased payroll taxes and rising gasoline prices, which together put meaningful pressure on the discretionary purchasing power of our guests," he added.
#6 The CFO of Family Dollar recently admitted to CNBC that this is a "challenging time" because of reduced consumer spending…
At Family Dollar where the average customer makes less than $40,000 a year, the combination of a two-percent hike in the payroll tax, rising gas prices and delayed tax refunds has created a "challenging time and an uncertain time for the consumer right now," said Mary Winston, the company’s chief financial officer.
"In our case, anything that takes money out of our customer’s wallet gives them less money to spend in our stores," she told CNBC. "So I think all of those things create nervousness for the consumer, and I think there are sometimes political dynamics going on that they might not even fully understand the details, but they know it’s not good."
#7 Even Wal-Mart is really struggling right now. According to a recent Bloomberg article, Wal-Mart is struggling "to restock store shelves as U.S. sales slump"…
Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
This all comes on the heels of an internal Wal-Mart memo that was leaked to the press earlier this month that described February sales as a "total disaster".
#8 Electronics retailer Best Buy continues to struggle mightily. Best Buy just announced that it will be eliminating 400 jobs at its headquarters in Richfield, Minnesota.
#9 It is being projected that many of the largest retail chains in America, including Best Buy, will close down hundreds of stores during 2013. The following is a list of projected store closings for 2013 that I included in a previous article…
Best Buy
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
J.C. Penney
Forecast store closings: 300 to 350
Office Depot
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Gamestop
Forecast store closings: 500 to 600
OfficeMax
Forecast store closings: 150 to 175
RadioShack
Forecast store closings: 450 to 550
#10 Another sign that consumer spending is slowing down is the fact that less stuff is being moved around in our economy. As I have mentioned previously, freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.
#11 Many young adults have no discretionary income to spend because they are absolutely drowning in student loan debt. According to the New York Federal Reserve, student loan debt nearly tripled between 2004 and 2012.
#12 The student loan delinquency rate in the United States is now at an all-time high. It is only a matter of time before the student loan debt bubble bursts.
#13 Due to a lack of jobs and high levels of debt, poverty among young adults in America is absolutely exploding. Today, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#14 According to one recent survey, 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#15 Median household income in the United States has fallen for four consecutive years. Overall, it has declined by more than $4000 during that time span.
#16 According to the U.S. Census Bureau, the middle class is currently taking home a smaller share of the overall income pie than has ever been recorded before.
Are you starting to get the picture?
Retailers are desperate for sales, but you can’t squeeze blood out of a rock.
For much more on how the middle class is absolutely drowning in debt, please see this article: "Money Is A Form Of Social Control And Most Americans Are Debt Slaves".
But if you listen to the mainstream media, they would have you believe that happy days are here again.
Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high. And I actually do believe that the Dow will blow right past it. In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.
But at some point, the financial markets will catch up with economic reality. It is just a matter of time.
In the meanwhile, those that are wise are taking advantage of these times of plenty to prepare for the great economic drought that is coming.
Don’t be caught living paycheck to paycheck and totally unprepared when the next wave of the economic collapse strikes. Anyone that believes that this debt-fueled bubble of false hope can last indefinitely is just being delusional.
http://theeconomiccollapseblog.com/arch … t-of-money
Statistics: Posted by yoda — Thu Feb 28, 2013 9:15 pm
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Other • Consumer Spending Drought: 16 Signs That The Middle Class Is
Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money
By Michael, on February 28th, 2013 Is "discretionary income" rapidly becoming a thing of the past for most American families? Right now, there are a lot of signs that we are on the verge of a nightmarish consumer spending drought. Incomes are down, taxes are up, many large retail chains are deeply struggling because of the lack of customers, and at this point nearly a quarter of all Americans have more credit card debt than money in the bank. Considering the fact that consumer spending is such a large percentage of the U.S. economy, that is very bad news. How will we ever have a sustained economic recovery if consumers don’t have much money to spend? Well, the truth is that we aren’t ever going to have a sustained economic recovery. In fact, this debt-fueled bubble of false hope that we are experiencing right now is as good as things are going to get. Things are going to go downhill from here, and if you think that consumer spending is bad now, just wait until you see what happens over the next several years.
Even though the Dow is surging toward a record high right now, everyone knows that things are not good for the middle class. A recent quote from CPA Howard Dvorkin kind of summarizes our current state of affairs very nicely…
"The fact of the matter is that America is broke — whether it’s mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months’ of savings," Dvorkin says."If you talk to people, most don’t have two pennies."
These days most Americans are living from paycheck to paycheck, and thanks to rising prices and rising taxes, those paychecks are getting squeezed tighter and tighter. Many families have had to cut back on unnecessary expenses, and some families no longer have any discretionary income at all.
The following are 16 signs that the middle class is rapidly running out of money…
#1 According to one brand new survey, 24 percent of all Americans have more credit card debt than money in the bank.
#2 J.C. Penney was once an unstoppable retail powerhouse, but now J.C. Penney has just posted its lowest annual retail sales in more than 20 years…
J.C. Penney Co. (JCP) slid the most in more than three decades after the department-store chain lost $4.3 billion in sales in the first year of Chief Executive Officer Ron Johnson’s turnaround plan.
The shares fell 18 percent to $17.40 at 11:28 a.m. in New York after earlier declining 22 percent, the biggest intraday drop since at least 1980, according to data compiled by Bloomberg. J.C. Penney yesterday said its net loss in the quarter ended Feb. 2 widened to $552 million from $87 million a year earlier. The Plano, Texas-based retailer’s annual revenue slid 25 percent to $13 billion, the lowest since at least 1987.
How much worse can things get? At this point the decline has become so steep for J.C. Penney that Jim Cramer of CNBC is declaring that they are in "a true tailspin".
#3 In the United States today, a new car has become out of reach for most middle class Americans according to the 2013 Car Affordability Study…
Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.
The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales. According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year.
#4 The founder of Subway Restaurants, Fred Deluca, says that the recent tax increases are having a noticeable impact on his business…
"The payroll tax is affecting sales. It’s causing sales declines," he said, estimating a decline of about 2 percentage points off sales at his restaurants. "There are a lot of pressures on consumers," Deluca said, adding "I think this is on the permanent side, but I think business will adjust to it."
#5 Many other large restaurant chains are also struggling in this tough economic environment…
Darden Restaurants, which owns the casual dining chains Oliver Garden, LongHorn Steakhouse and Red Lobster, said blended same-store sales at its three eateries would be 4.5 percent lower during its fiscal third quarter.
Clarence Otis, Darden’s chairman and chief executive, said that "while results midway through the third quarter were encouraging, there were difficult macro-economic headwinds during the last month of the quarter."
"Two of the most prominent were increased payroll taxes and rising gasoline prices, which together put meaningful pressure on the discretionary purchasing power of our guests," he added.
#6 The CFO of Family Dollar recently admitted to CNBC that this is a "challenging time" because of reduced consumer spending…
At Family Dollar where the average customer makes less than $40,000 a year, the combination of a two-percent hike in the payroll tax, rising gas prices and delayed tax refunds has created a "challenging time and an uncertain time for the consumer right now," said Mary Winston, the company’s chief financial officer.
"In our case, anything that takes money out of our customer’s wallet gives them less money to spend in our stores," she told CNBC. "So I think all of those things create nervousness for the consumer, and I think there are sometimes political dynamics going on that they might not even fully understand the details, but they know it’s not good."
#7 Even Wal-Mart is really struggling right now. According to a recent Bloomberg article, Wal-Mart is struggling "to restock store shelves as U.S. sales slump"…
Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
This all comes on the heels of an internal Wal-Mart memo that was leaked to the press earlier this month that described February sales as a "total disaster".
#8 Electronics retailer Best Buy continues to struggle mightily. Best Buy just announced that it will be eliminating 400 jobs at its headquarters in Richfield, Minnesota.
#9 It is being projected that many of the largest retail chains in America, including Best Buy, will close down hundreds of stores during 2013. The following is a list of projected store closings for 2013 that I included in a previous article…
Best Buy
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
J.C. Penney
Forecast store closings: 300 to 350
Office Depot
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Gamestop
Forecast store closings: 500 to 600
OfficeMax
Forecast store closings: 150 to 175
RadioShack
Forecast store closings: 450 to 550
#10 Another sign that consumer spending is slowing down is the fact that less stuff is being moved around in our economy. As I have mentioned previously, freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.
#11 Many young adults have no discretionary income to spend because they are absolutely drowning in student loan debt. According to the New York Federal Reserve, student loan debt nearly tripled between 2004 and 2012.
#12 The student loan delinquency rate in the United States is now at an all-time high. It is only a matter of time before the student loan debt bubble bursts.
#13 Due to a lack of jobs and high levels of debt, poverty among young adults in America is absolutely exploding. Today, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#14 According to one recent survey, 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#15 Median household income in the United States has fallen for four consecutive years. Overall, it has declined by more than $4000 during that time span.
#16 According to the U.S. Census Bureau, the middle class is currently taking home a smaller share of the overall income pie than has ever been recorded before.
Are you starting to get the picture?
Retailers are desperate for sales, but you can’t squeeze blood out of a rock.
For much more on how the middle class is absolutely drowning in debt, please see this article: "Money Is A Form Of Social Control And Most Americans Are Debt Slaves".
But if you listen to the mainstream media, they would have you believe that happy days are here again.
Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high. And I actually do believe that the Dow will blow right past it. In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.
But at some point, the financial markets will catch up with economic reality. It is just a matter of time.
In the meanwhile, those that are wise are taking advantage of these times of plenty to prepare for the great economic drought that is coming.
Don’t be caught living paycheck to paycheck and totally unprepared when the next wave of the economic collapse strikes. Anyone that believes that this debt-fueled bubble of false hope can last indefinitely is just being delusional.
http://theeconomiccollapseblog.com/arch … t-of-money
Statistics: Posted by yoda — Thu Feb 28, 2013 9:15 pm
View full post on opinions.caduceusx.com
Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money
Is “discretionary income” rapidly becoming a thing of the past for most American families? Right now, there are a lot of signs that we are on the verge of a nightmarish consumer spending drought. Incomes are down, taxes are up, many large retail chains are deeply struggling because of the lack of customers, and at this point nearly a quarter of all Americans have more credit card debt than money in the bank. Considering the fact that consumer spending is such a large percentage of the U.S. economy, that is very bad news. How will we ever have a sustained economic recovery if consumers don’t have much money to spend? Well, the truth is that we aren’t ever going to have a sustained economic recovery. In fact, this debt-fueled bubble of false hope that we are experiencing right now is as good as things are going to get. Things are going to go downhill from here, and if you think that consumer spending is bad now, just wait until you see what happens over the next several years.
Even though the Dow is surging toward a record high right now, everyone knows that things are not good for the middle class. A recent quote from CPA Howard Dvorkin kind of summarizes our current state of affairs very nicely…
“The fact of the matter is that America is broke — whether it’s mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months’ of savings,” Dvorkin says.”If you talk to people, most don’t have two pennies.”
These days most Americans are living from paycheck to paycheck, and thanks to rising prices and rising taxes, those paychecks are getting squeezed tighter and tighter. Many families have had to cut back on unnecessary expenses, and some families no longer have any discretionary income at all.
The following are 16 signs that the middle class is rapidly running out of money…
#1 According to one brand new survey, 24 percent of all Americans have more credit card debt than money in the bank.
#2 J.C. Penney was once an unstoppable retail powerhouse, but now J.C. Penney has just posted its lowest annual retail sales in more than 20 years…
J.C. Penney Co. (JCP) slid the most in more than three decades after the department-store chain lost $4.3 billion in sales in the first year of Chief Executive Officer Ron Johnson’s turnaround plan.
The shares fell 18 percent to $17.40 at 11:28 a.m. in New York after earlier declining 22 percent, the biggest intraday drop since at least 1980, according to data compiled by Bloomberg. J.C. Penney yesterday said its net loss in the quarter ended Feb. 2 widened to $552 million from $87 million a year earlier. The Plano, Texas-based retailer’s annual revenue slid 25 percent to $13 billion, the lowest since at least 1987.
How much worse can things get? At this point the decline has become so steep for J.C. Penney that Jim Cramer of CNBC is declaring that they are in “a true tailspin“.
#3 In the United States today, a new car has become out of reach for most middle class Americans according to the 2013 Car Affordability Study…
Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.
The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales. According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year.
#4 The founder of Subway Restaurants, Fred Deluca, says that the recent tax increases are having a noticeable impact on his business…
“The payroll tax is affecting sales. It’s causing sales declines,” he said, estimating a decline of about 2 percentage points off sales at his restaurants. “There are a lot of pressures on consumers,” Deluca said, adding “I think this is on the permanent side, but I think business will adjust to it.”
#5 Many other large restaurant chains are also struggling in this tough economic environment…
Darden Restaurants, which owns the casual dining chains Oliver Garden, LongHorn Steakhouse and Red Lobster, said blended same-store sales at its three eateries would be 4.5 percent lower during its fiscal third quarter.
Clarence Otis, Darden’s chairman and chief executive, said that “while results midway through the third quarter were encouraging, there were difficult macro-economic headwinds during the last month of the quarter.”
“Two of the most prominent were increased payroll taxes and rising gasoline prices, which together put meaningful pressure on the discretionary purchasing power of our guests,” he added.
#6 The CFO of Family Dollar recently admitted to CNBC that this is a “challenging time” because of reduced consumer spending…
At Family Dollar where the average customer makes less than $40,000 a year, the combination of a two-percent hike in the payroll tax, rising gas prices and delayed tax refunds has created a “challenging time and an uncertain time for the consumer right now,” said Mary Winston, the company’s chief financial officer.
“In our case, anything that takes money out of our customer’s wallet gives them less money to spend in our stores,” she told CNBC. “So I think all of those things create nervousness for the consumer, and I think there are sometimes political dynamics going on that they might not even fully understand the details, but they know it’s not good.”
#7 Even Wal-Mart is really struggling right now. According to a recent Bloomberg article, Wal-Mart is struggling “to restock store shelves as U.S. sales slump“…
Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
This all comes on the heels of an internal Wal-Mart memo that was leaked to the press earlier this month that described February sales as a “total disaster”.
#8 Electronics retailer Best Buy continues to struggle mightily. Best Buy just announced that it will be eliminating 400 jobs at its headquarters in Richfield, Minnesota.
#9 It is being projected that many of the largest retail chains in America, including Best Buy, will close down hundreds of stores during 2013. The following is a list of projected store closings for 2013 that I included in a previous article…
Best Buy
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
J.C. Penney
Forecast store closings: 300 to 350
Office Depot
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Gamestop
Forecast store closings: 500 to 600
OfficeMax
Forecast store closings: 150 to 175
RadioShack
Forecast store closings: 450 to 550
#10 Another sign that consumer spending is slowing down is the fact that less stuff is being moved around in our economy. As I have mentioned previously, freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.
#11 Many young adults have no discretionary income to spend because they are absolutely drowning in student loan debt. According to the New York Federal Reserve, student loan debt nearly tripled between 2004 and 2012.
#12 The student loan delinquency rate in the United States is now at an all-time high. It is only a matter of time before the student loan debt bubble bursts.
#13 Due to a lack of jobs and high levels of debt, poverty among young adults in America is absolutely exploding. Today, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#14 According to one recent survey, 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.
#15 Median household income in the United States has fallen for four consecutive years. Overall, it has declined by more than $4000 during that time span.
#16 According to the U.S. Census Bureau, the middle class is currently taking home a smaller share of the overall income pie than has ever been recorded before.
Are you starting to get the picture?
Retailers are desperate for sales, but you can’t squeeze blood out of a rock.
For much more on how the middle class is absolutely drowning in debt, please see this article: “Money Is A Form Of Social Control And Most Americans Are Debt Slaves“.
But if you listen to the mainstream media, they would have you believe that happy days are here again.
Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high. And I actually do believe that the Dow will blow right past it. In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.
But at some point, the financial markets will catch up with economic reality. It is just a matter of time.
In the meanwhile, those that are wise are taking advantage of these times of plenty to prepare for the great economic drought that is coming.
Don’t be caught living paycheck to paycheck and totally unprepared when the next wave of the economic collapse strikes. Anyone that believes that this debt-fueled bubble of false hope can last indefinitely is just being delusional.
View full post on The Economic Collapse