www.agweb.com 3/7/2003 by Roger Bernard

Rising gasoline prices are catching consumers' attention across the country. And with good reason as the Energy Information Administration (EIA) is noting that pump prices have hit record marks in 16 states, and a U.S.-wide record is in danger of falling. Here's a link to a story we ran on AgWeb.com yesterday on the situation.

But for agriculture, the impacts run across several areas like diesel fuel, fertilizer and nitrogen costs. We want your feedback on what you're experiencing as spring approaches. Have you had trouble locking up N supplies or diesel fuel? How much have your costs gone up, etc.?

Drop us a line using this email link. We'll compile the responses as they come in. As usual, please include your location -- we won't use your name.

Here's what one grower email us already this morning:

"The last time we had a quote on anhydrous it was $385 and going higher. The said $400-$450 would be the norm for this spring. What irritates me is that this fertilizer was produced with cheap natural gas last fall. This is the same thing that happened two years ago. You would think that there are always going to be about the same amount of acres planted year in year out. So don't the fertilizer companies buy natural gas ahead of time if they see it going up? In my opinion it is beyond gouging.We need to call it for what it really is LEGITIMATE STEALING!

"As for fuel prices when Venezuela went on strike Saudi Arabia stepped up to the plate and in no uncertain terms said they would fill ANY gaps in oil production. There is no disruption in production right now such as the war so what the heck is going? Oh, I forgot it is the same thing as my previous paragraph -- LEGITIMATE STEALING! I haven't bought any because I still think that once the war with Iraq starts and they find no real disruption then prices for gas and diesel should retreat quickly.

"There is a silver lining in all this: If prices for gas and diesel double or triple or even more. Then that will create a call for more self reliance on renewable fuels such as ethanol and biodiesel. Maybe that is exactly the catalyst we need. The American public has always wondered why we buy oil from the very countries that want our demise. It doesn't make sense to fund terror thru the back door. I wonder what the true price of fuel is when you add in the cost of military protection of the oil tankers that come out of the Persian Gulf."

sg.biz.yahoo.com Friday March 7, 5:22 AM Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. stocks retreated among concerns about the economy and with the shadow of Iraq still hanging over the market.

Select from the most reliable agencies  Worries about corporate results continued to weigh on investors, who were faced with poor retail-sales reports and an earnings warning from Raytheon. Shares of Raytheon fell 5.5%.

The Dow Jones Industrial Average shed 101.61, or 1.31%, to end at 7673.99. The Nasdaq Composite Index fell 11.48, or 0.87%, to 1302.92. The Standard & Poor's 500-stock index dropped 7.75, or 0.93%, to 822.10.

Retail-sales figures for the month of February weren't encouraging, as stores were hampered by the big blizzard that hit the East Coast last month. Shares of Sears Roebuck fell 3.5%, while shares of May Department Stores dropped 2.2%.

Regarding the overall market environment, "after all is said and done, what this is all about is the economy and earnings," said Hugh Johnson, chief investment strategist at First Albany in Albany, N.Y. "And the outlook for the economy and earnings is deteriorating. Oil prices remain so high, and as a result the outlook for the economy is getting gloomier."

A worse-than-expected report on weekly jobless claims also spooked investors, suggesting that employment conditions are weakening, Johnson added. But the economic picture remains muddy, as data on productivity and factory orders painted a more positive picture.

The strategist noted that all the attention that has been given to the Iraqi situation may be masking other problems for the market. "The buzz on Wall Street is that if Iraq gets put behind us the stock market . . . will do well," he said.

But even if the Iraqi standoff is resolved, "there is still North Korea and terrorism, there is still Venezuela," Johnson said.

www.springfieldnewssun.com Dow Jones News Service

NEW YORK (Dow Jones News)--Crude oil futures rallied Tuesday, staging a sharp recovery after three straight sessions of declines on hopes that a war with Iraq could be averted.

Between Thursday and Monday, prices fell sharply as Iraq's increased cooperation with U.N. weapons inspectors and Turkey's rejection of access to U.S. troops sparked speculation that a U.S.-led attack on Iraq could be avoided, or at least delayed by several weeks.

But prices turned around Tuesday as the U.S. stepped up military preparations for a possible war and indicated it would seek U.N. Security Council approval of a resolution on military action next week, analysts said.

At the New York Mercantile Exchange, April crude oil futures rose $1.01 to end at $36.89 a barrel after rising as high as $37.18 intraday.

April heating oil futures ended up 1.26 cent at $1.0486 a gallon, while April gasoline futures climbed 1.74 cent to settle at $1.1122 a gallon.

At London's International Petroleum Exchange, April Brent futures rose 61 cents to close at $33.09 a barrel.

Natural gas for April delivery retreated 12.1 cents to settle at $7.041 per 1,000 cubic feet.

American officials, dismissing Iraq's destruction of its short-range Al Samoud 2 missiles as inadequate and insincere, pressed ahead for a final confrontation.

Military forces continued to mass in the Persian Gulf, with the United States deploying an additional 60,000 troops to the region atop the 230,000 troops already there. Turkey is also debating whether to resubmit a parliamentary motion to allow more than 60,000 U.S. troops to use the country as a northern front against Iraq.

At the same time, officials said they plan to bring to a vote next week a Security Council resolution authorizing military action against Iraq.

The measure, backed by Great Britain and Spain, faces stiff opposition from Security Council members, with Russia's foreign minister Igor Ivanov issuing a veiled threat to veto it.

But a White House spokesman said the United States believes it has the nine votes necessary to pass the resolution, though he left open the possibility that the United States might withdraw the resolution if it concludes it would not pass.

Regardless of the outcome of a vote, the United States says it's prepared to press ahead with an attack, barring an 11th-hour decision by Iraq to give up its weapons of mass destruction.

U.S. officials say there is virtually nothing Iraq could do to convince them that it is serious about disarming. In a speech Tuesday, President Bush reiterated his determination to see Iraq stripped of its weapons of mass destruction.

Energy traders worry that an attack on Iraq could disrupt the flow of oil from the Persian Gulf.

Meanwhile, OPEC and non-OPEC oil ministers will meet next week to discuss what they could do in the event of a war in Iraq, an official from the Organization of Petroleum Exporting Countries said.

OPEC countries have increased production in recent months in response to a strike in Venezuela and soaring oil prices. According to a Dow Jones Newswires survey, OPEC crude oil output jumped by 1.43 million barrels a day to 27.091 million barrels a day in February from January.

triad.bizjournals.com From the February 28, 2003 print edition Boris Hartl   The Business Journal

Crowds are thin these days at Liberty Oak, a restaurant that opened in downtown Greensboro a few years ago when interest and activity in a revitalized center city began to gain ground.

Nowadays, Liberty Oak co-owner John Fancourt can finger everything from wintery weather to the slow economy as being at least partly to blame for the slowdown. But another emerging factor, Fancourt says, is the possibility of war with Iraq.

Half a world away from potential battlefields, Triad merchants like Fancourt are among the business owners already feeling tremors from the possibility of conflict in the Persian Gulf.

"War is on everybody's mind, and people are uncertain what effect it will have," Fancourt said.

Economists say the timing of a possible war, coming in the midst of an anemic recovery from a national recession and after three years of bear equity markets, makes the current uncertainties all the more difficult for Triad businesses to absorb.

While some economists, including Don Jud, an economics professor at UNC-Greensboro, portend a quick war could actually help the economy by returning a sense of normalcy and stability, a prolonged conflict will likely push the nation back into recession.

Gas and diesel prices affected

One place the potential war's effect is already being felt is at Triad gas pumps.

The average price for a gallon of gasoline in North Carolina is $1.591, the highest state average in the last 20 years, AAA Carolina officials said. Since the middle of January, the national average of self-service gasoline has jumped from $1.47 to $1.61 a gallon.

Local freight haulers, distributors and logistics companies have been particularly hard hit.

Steve Immel, terminal manager for AAA Cooper Transportation in Greensboro, has seen the national price of diesel fuel, which now averages $1.76 a gallon, force changes in some operating procedures.

"If we have additional fuel costs, we'll pass them onto customers," Immel said. "They will then pass these costs on. It's definitely a chain-link effect."

Chris Caffey, president of a beer distributing company in Greensboro, has 70 vehicles that burn about 20,000 gallons of fuel a month. As the head of I.H. Caffey Distributing Co. Inc., he has seen his company's monthly fuel costs rise 33 percent to $40,000.

The increased fuel costs won't necessitate any work force cutbacks, but the company may delay building expansion plans.

'Dealing with lower margins'

"We cope by dealing with lower margins, and we hope things get better for us," Caffey said.

A portion of the high prices can be attributed to the strike in Venezuela, which is hampering crude-oil distribution to the United States and forcing the use of more crude oil to produce heating oil, said Gary Harris, executive vice president of the North Carolina Petroleum Marketers Association in Raleigh.

A prolonged military campaign or damage to Iraqi oil fields could push oil prices to $35 a barrel or higher, analysts said, thus further increasing production costs.

"The fuel industry is simply unsure of what is going to happen in the future," said David Parsons, the president and CEO of AAA Carolinas. "Are we really going to war with Iraq? What will the parameters of that war be? Will oil supplies be threatened?"

Until those questions are answered, businesses such as AAA Cooper Transportation and I.H. Caffey Distributing Co. will wait to see what develops next.

"With the economy softening, hopefully it will be clear, one way or another, whether we go in or pull back," said Bart Lassiter, head of City Transfer and Storage Co. Inc. in High Point.

Jud, the UNC-Greensboro economics professor, calls the increased gas prices a "big tax" on everyone that is curbing consumer spending. And Fancourt's restaurant is only one example.

A war-time benefit

"Consumers are more hesitant and cautious with their money, and that's true with any (expendable) activity," said Paul Stone, president of the North Carolina Restaurant Association in Raleigh.

People often eat out when they are in a celebratory mood, and these are not good times to do so, he said.

In Winston-Salem, Dino Cortesis is dealing with a 15 percent drop in business at Cloverdale Kitchen. He said war talk and the soft economy have affected his largest customer base — retirees on fixed incomes.

"They've seen their retirement portfolios drop 25 (percent) to 30 percent, and that's affected their spending habits," he said.

The news isn't all bad in the Triad. Textile companies such as Glen Raven Inc., which are supplying the fabric needed to make parachutes, are actually expanding working hours to meet demands.

David Noer, a business professor at Elon University, said textiles, which have been much maligned in the last few years, should see an immediate boost as they supply the military with war-time materiel.

Glen Raven has increased production to seven days a week, four shifts per day at its Burnsville plant, said Gary Zumstein, vice president of sales for the Glen Raven-based company. Glen Raven is producing the yarn for an Asheville-based company to produce the actual cargo parachutes used to drop equipment.

"From a military standpoint, yes, this is good," Zumstein said. "The government has found some money for purchasing that has been tight."

Textile companies are not the only ones supplying the military.

Antenna Mast Solutions Inc., which has an office in Eden, is enjoying a 300 percent increase in business due to war- related efforts.

The company creates portable masts designed to hold a combination of devices, including weather sensors and cameras. The masts are built with carbon alloy designed to allow military personnel to dissemble the masts quickly.

Business is also booming at the Winston-Salem Industries for the Blind. The nonprofit organization has completed an order of about 2,000 mattresses for an aircraft carrier, said Larry Colbourne, director of development.

Industries of the Blind has also completed a Department of Defense order for about 22,000 plastic pouches to hold gas masks. Those work orders should help Industries for the Blind reach about $40 million in sales for 2003, which will then be reinvested into the organization.

Reach Boris Hartl at (336) 370-2917 or bhartl@bizjournals.com.

www.modbee.com Posted: March 3, 2003 @ 07:28:00 PM PST Scripps Howard News Service

(SH) - Are you as mad as I am about the economy? I'm wondering why the American public seems to be as blithely tolerant of an economy that has been almost purposefully tipped away from the brink of recovery and toward (if not over) the brink of recession for more than a year now.

First, allow me to ask you a couple of questions. Are you better off financially than you were three years ago? Is your investment portfolio (if you're lucky enough to have one) worth anywhere near what it was in 2000? If you don't have investments, how's your pension fund doing? If you don't have any form of retirement other than Social Security, are you still employed at this point and are most of your friends and family members still employed?

If your answer to most of these questions is no, then why aren't you mad as heck and why aren't you doing something about it? I agree we have major security risks in today's world. I agree Saddam Hussein is a bad (to wit, evil) man who needs to be dealt with accordingly. I don't agree that we need to tank our economy in the process. But that is precisely what the Bush Administration is doing.

Have you noticed the price of gas recently? It has climbed to $2.00/gallon and more in many major American cities. A barrel of oil, now teetering on the brink of $40.00, was a mere $16.00 when President Clinton left office.

It even dropped to around $13.00 per barrel shortly after President Bush took office. But his ceaseless war talk for the last year plus has driven oil prices to hysterical levels. Higher oil prices reverberate endlessly throughout the economy.

President Bush's war strategy is directly responsible for higher gas prices, higher oil and natural gas prices to heat our homes, increased airline ticket prices, higher food prices (which must be shipped and trucked into grocery stores,) higher UPS and Fed Ex shipping costs (both companies have instituted fuel surcharges to ship packages) and more for, well, just about everything we eat, drink, drive to, and need to live.

The White House, of course, is dodging blame for its economic capriciousness. Presidential Spokesman Ari Fleischer, that master manipulator and spin-meister extraordinaire, told reporters on Friday the White House is "concerned" about high oil prices. (If that isn't the epitome of a day late and a dollar short, what is?) He blamed higher prices on "a confluence" of factors including a "cold winter" and "short supplies."

Give me a break. If I listen to one more newscast lead by the phrase, "The stock market dropped and oil prices spiked today on threats of war" I'm going to scream. Yes, Venezuela's instability is contributing to higher oil prices. So much so, Venezuela may account for $2-3.00 of the recent $25.00 run up. And yes, supplies are scarce. The reason is business-savvy suppliers are refusing to purchase oil at $40.00 a barrel.

They're waiting for "the war to be over" so they can stock up on cheaper supplies. And a cold winter? On the East Coast, sure. In the Midwest, it's been positively balmy by comparison to normal winter weather.

This oil-savvy White House is hoping for a quick war, and a return by summer to cheap gas (just in time to make the President look good for his 2004 race.) But hope and reality are frequently two different things.

According to the Atlanta Journal Constitution, "... it may be that the Energy Crisis of 2003 has already begun. Certainly money has already been snatched from American pockets and shipped overseas, threatening an already fragile economic recovery." And hope for a quick war is ludicrous on its face.

Even if the war itself is short, Americans will be paying hundreds of billions of dollars to repair Iraqi oil fields and subsidize a replacement Iraqi government for years if not decades to come.

So let me ask you. Why aren't you as mad about it as I am?

Bonnie Erbe, host of the PBS program "To the Contrary," writes this column for Scripps Howard News Service. E-mail her at bonnieerbe@CompuServe.com.