Farmers are delaying their planting because of the inability for the railway system to provide them with the required fertilizer. The rail cars are busy moving the crude oil from the Dakotas due to the failure of the Obama administration to approve the Keystone XL pipeline. US producer prices and US household debt both increased in April. An Andy Warhol work brought more than $100 million at auction and Panera moves to high-tech ordering.
Obama’s failure to approve pipeline hurting farmers’ ability to plant crops
The failure of the Obama administration to approve the Keystone Pipeline is now hurting the ability of the farmers in the upper Midwest to plant their crops. According to the Wall Street Journal, competition for rail cars has crimped the ability for farmers to ship grain harvested last year and has created a backlog in fertilizer supplies. This could delay farmers in Minnesota, Wisconsin and the Dakotas from planting their crops on time. The rail car competition has caused fertilizer makers such as Mosaic Co. to report up to 43 percent losses in first quarter earnings. North Dakota State University estimated that state farmers lost $67 million in revenue since the start of the year. The South Dakota Corn Growers Association indicates that its farmers still need to ship 31 percent of last year’s harvest. Ethanol makers are experiencing similar issues. The railroads are shipping more crude oil from North Dakota’s Bakken Shale region, which is improving the overall US economy. Yet average wait times for trains have increased dramatically. As the railroads work to increase capacity and build more lines, the ability to ship crude oil through a pipeline might actually help the farmers in the heartland as well. Sorry, duck-lovers.
US Producer prices increase in April
The prices US companies receive for their goods and services increased by the largest percentage in seven months in April, as reported by the Associated Press. The Labor Department says that the producer price index rose 0.6 percent in April, after increasing 0.5 percent in March. The gains suggest that inflation is picking up. In the past 12 months, producer prices have increased 2.1 percent, the largest 12-month increase in more than two years. More expensive food prices and higher retail and wholesale profit margins led to the increase. The current gain is just above the Federal Reserve’s 2 percent inflation target. Food costs jumped 2.7 percent, the highest in more than three years, driven by an 8.4 percent increase in meat prices. The increase in meat prices is primarily due to the drought seen in the previous summers and is expected to continue at least throughout this summer.
US household debt increases
Americans increased their overall borrowing between January and March to $11.65 trillion, according to a report from the Federal Reserve Bank of New York. The Wall Street Journal indicates that this was the third consecutive quarterly increase. Household debt included mortgages, credit cards, auto loans and student loans. The total increase was $129 billion. Mortgage balances rose $116 billion with fewer people going into foreclosure. Auto loans increased $12 billion. Student loan balances increased $31 billion, maintaining its place as the fastest growing debt category. Credit card debt, however, fell to the lowest levels since 2002. Balances fell $24 billion from the prior quarter, just slightly below the level from a year earlier. This indicates that consumers are staying away from “bad debt”…but may also indicate that they will continue to be cautious about needless retail purchases.
Andy Warhol works bring more than $100 million at auction
Two works from Andy Warhol’s “Death and Disaster” series sold for a combined $100 million Tuesday, according to CNBC. Warhol’s “Race Riot, 1964” , a provocative four panel painting of unrest in Birmingham, Alabama, went for $62.9 million at Christie’s, exceeding the estimate of $45 million. Warhol’s 1962 painting “White Marilyn”, completed shortly after Marilyn Monroe committed suicide, went for $41 million, well above its estimate of $12-18 million. Christie’s sold 68 pieces on Tuesday raising $744 million.
Panera moves to high-tech ordering
According to USA Today, Panera Bread is changing the way consumers order fast food. Its goal is to avoid having customers stand in lines in order to pay and order food. Ordering kiosks are being phased in at Panera stores nationwide and the number of cash registers is being reduced. Most stores will receive four to eight kiosks. Employees who currently man registers will be moved to food preparation or to delivering food to tables. No job cuts will occur. Customers will also be able to order via their mobile phones or laptops. They will also be able to place “to go” orders via mobile and online up to five days in advance. Kiosks are currently being used in Boston and Charlotte and will expand to another 150 locations this year. The tech upgrade is anticipated to cost $125,000 per store.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.