News Update
Jan. 22, 2008

Fed Slashes Interest Rate

The Federal Reserve this morning slashed a key interest rate by three-quarters of a percentage point, The Washington Post reported, bringing rates to 3.5%. The largest rate cut in at least 18 years, the move was meant to stymie a weakening U.S. economy and is expected to affect everything from certain loans and credit card payments to auto loan rates and lines of credit.

Meanwhile, U.S. markets face a looming recession.

Following an announcement last week laying out a $150-billion tax benefit package, President Bush was scheduled to meet with lawmakers today to discuss an economic stimulus plan to quickly boost the slumping economy, reports.

According to The Washington Post, the Fed said it had cut rates due to a worsening U.S. housing market, growing unemployment rate and an overall weakening of the economy.

In a statement released last week, National Cattlemen’s Beef Association (NCBA) Chief Economist Gregg Doud said the economic downturn, coupled with more affordable competing proteins in the meatcase could spell trouble for beef demand in the coming months.

Southeast Producers Feel the Hurt of Record Drought

Without adequate rain to maintain pastures and grow hay and forage, the worst drought on record in the Southeast is continuing to hammer the area’s cattle producers. Some producers are reporting that feed costs have more than doubled, leaving many struggling to keep up with the rising cost of inputs.

Many producers have been forced to liquidate their herds because they can no longer afford to feed them. Drinking water for cattle is also in short supply as ponds and creeks dry up, forcing producers to purchase water for cattle, along with feed. In addition, producers are reporting that in many instances cattle are as much as 100 pounds (lb.) lighter than normal.

It is estimated that up to one quarter of the United States’ calf production is in the Southeast, the area comprised by Virginia, North Carolina, South Carolina, Georgia, Alabama and Florida. The USDA says cattle processing is up 19% in this region compared to the same time frame in 2006.

— Information provided by “Cattlemen’s Capitol Concerns,” distributed by NCBA.

To Get Ahead, Start With Financial Check-up

The new year may be the most difficult time to take a hard look at one’s finances, what with bills from the holidays in the mail, but it’s also one of the best, according to a financial management specialist.

Assessing your financial situation is a good first step in reducing debt, building an emergency fund and reaching both short- and long-term financial goals, said Marilyn Bischoff, Extension family economics specialist, University of Idaho, Boise.

To begin, make a list of the current value of assets such as the equity in your home, balances in savings and retirement accounts and emergency fund, said Bischoff, who was in Manhattan Jan. 17 to train Kansas State University (K-State) Research and Extension agents.

List liabilities such as the balance due on a home mortgage; loans, such as school, automobile or other loans; credit card; and other debt.

Then, to estimate net worth, subtract the amount owed from the dollar value of assets.

The bottom line may not meet current goals or expectations, but Bischoff offered money management tips to track spending, reduce debt and build financial security:

  • Make a list of estimated weekly, bi-weekly, monthly and annual expenses.
  • Carry a small notebook to jot down actual expenses.
  • Periodically, compare actual expenses with estimated expenses. If spending more than anticipated in one or more categories, look for ways to trim unnecessary expenses, such as a daily trip to the vending machine at work. Take fruit or a cereal bar for a snack, or carry a thermos of coffee or small cooler of water to yield a savings.
  • Shop with a list — and stick to it.
  • Build an emergency fund, rather than using a credit card and adding debt to cover unanticipated expenses like household or auto repairs, emergency travel or illness.
  • Pay down debt. The usual advice is to pay debt that has the highest interest first, but, for some, paying off the card with the lowest balance first can signal a turnaround that allows people to take control of their finances. Make the minimum payment due on other debts to avoid late fees, interest charges, penalties, etc.
  • Mail payments promptly to avoid late fees and added interest charges.
  • No matter how tight the budget, allow some discretionary money — perhaps a long weekend, rather than a more costly vacation.
  • Save regularly — even a dollar a day will add up to $365 a year, plus interest.

More information on managing money is available at county and district K-State Research and Extension offices and on the Extension web site, at

— Release provided by K-State Research & Extension. 

— compiled by Crystal Albers, associate editor, Angus Productions Inc.

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