Nature Noted

Notes on a changing Nature

Location: Bellville, Texas, United States

I never would have predicted this one

Wednesday, August 17, 2005

Rain Redux

To my little musings yesterday on the lack of rain in this part of the world, let me point your attention to a blog that covers an entirely different universe.... business. One of the blogs I enjoy reading is Jeff Matthews Is Not Making This Up. Matthews is a business analyst who presents (to me, at least) real world business savvy insights. So what does this have to do with a lack of rain?
In his latest entry Matthews recounts a recent conference call by John Deere, as the leaders of the global farm equipment company tried to explain a recent slowdown in sales. Here's how Matthews put it....
There have been plenty of articles in recent days about the Midwest drought and barges grounded on mud in the Ohio and Mississippi rivers, so the company’s U.S. commentary was not much of a surprise:
Also during the quarter drought really took hold in the U.S. Midwest. While this has not hurt ag retail sales to date but as the dryness persisted into the critical July pollination period for corn it became clear to us that customers in drought stricken areas could suffer meaningful yield losses and they might put off equipment purchases as a result.
But the drought is not just concentrated in the central United States.
In Europe, the drought in southern Europe that was mentioned on the conference call in May intensified and spread. Spain and Portugal are the driest in 60 years and drought continues, conditions have spread to parts of France and Italy.
Furthermore, it goes beyond North America and the Old World:
Brazil, already hurt by drought and narrowing farm incomes, witnessed the continued weakening of the U.S. dollar versus the real during the quarter. The dollar is down 21% versus the real over last year. That is bad news for farmers who pay their expenses in real but sell their crops in U.S. dollars which have been losing value. Just how weak are things in Brazil? Well Deere's combine sales are off about 70% in the last six months and tractors over 50%

Read the rest of the entry, but the point is inescapable. Wall Street is starting to notice this Global Warming Thing.


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