n Could it be that Congressional leaders could come to a budget agreement ahead of the deadline of Jan. 19 when portions of the government run out of money again?

Former Speaker Kevin McCarthy did a budget deal that his House caucus later reneged on costing him his job. The new Speaker, Mike Johnson, who actually physically sat next to Senate Leader Chuck Schumer and shook his hand, also has reportedly done a deal for $16 billion in less spending than Democrats had proposed. The deal is so far a framework with plenty of time yet for it to blow up as the many details are negotiated. This would otherwise seem way too easy. The problem is that Republicans will not give their Speaker the authority to finalize a negotiation. First McCarthy and now Johnson negotiated deals on the behalf of the GOP House, but then when they take the deal back to their caucus, it balks. This process will not work. Every Indian cannot negotiate for the tribe. They have to empower a chief to do that and if they do not, then Johnson is just another Indian. Johnson got them a better deal but will they take it? The USDA is one of the agencies that will run out of money Jan. 19 if funding is not reauthorized. They should be able to have their annual crop production reports ready for release Friday before they turn into a pumpkin and the lights go out. Essential services, such as meat and food safety inspection provided by USDA, continue unfunded under disruption.

n I received my sixth COVID vaccination last week. The first was on Feb. 5, 2021. This time my arm was sensitive for a few days but felt fine otherwise. Along with the boosters I got COVID on a trip out East after they reopened from the pandemic. I was ill but not deathly so. My wife however also contracted COVID then and she got pneumonia and was seriously sick. Her sister, who is a nurse practitioner who tested us, said that had she not been vaccinated her life would have been in danger. She had a second bout of COVID in Fairbanks on our summer trip to Alaska. She never left the room for a couple days and I took care of her but never contracted COVID again myself. Both rounds of COVID were contracted away from home. I also get flu shots each year and have never gotten the flu since being vaccinated. They change the flu vaccine every year to address new strains and are doing the same thing with COVID vaccines. The latest strain of COVID to become dominant is named JN.1. I think that it is interesting how they track these strains by testing waste water from sewers. The new strain is covered by the COVID vaccine but the latest version has only been received by just 19% of Americans. JN.1 may still cause illness despite vaccination or previously having had COVID but COVID deaths are running half of what they were a year ago. That is still 1,400 deaths per week. There were twice as many hospital admissions for influenza as for COVID as the flu season took off. The highest levels of COVID are being found in the Midwest. I am not surprised.

n Despite all of the talk about the Fed reducing interest rates, have you noticed any credit rates on farm loans that have gone down? No? That is because none have and none will for a while yet. I think the Fed could actually reduce their funds rate and banks will lag following suit. I hear of rates on lines of credit ranging from 7.5% for those who locked them up early to 9.5%. There are banks with securities portfolios that are under water. They invested too far out when rates were low and now that rates have jumped have marked-to-market losses on their Treasuries. That is why they will be slow to reduce the rates they charge for loans. Banks appear to have reduced loan risk but have inflated deposit risk to deal with. Deposits have gotten expensive and banks have to deal with nervous depositors with balances above the FDIC insured limit. Home mortgage rates fell about a point but they will not stay down if the Fed doesn’t put some action where the intention was set, forecasting lower rates. Mortgage rates are set by the market and not by the Fed but the Fed has a lot to do with them as it buys many mortgages. Demand went soft at recent highs and the weakness since has resuscitated some demand for mortgages. It takes an above-average two-person income for a household to be able to afford a median priced home. The boomers have their mortgages locked in at 3% and the millennials do not have a down payment. Neither home prices nor interest rates have gone down enough to induce more buyers to take the leap. The American dream of owning a home is unaffordable for many Americans.

n Some say that the job market is starting to show signs of slowing but the strong jobs market has not changed hardly one iota where we live. I do not think it is that much different elsewhere. “Now Hiring” signs still proliferate store fronts and businesses. The HR business is amazingly strong. There is a nursing shortage that is being subsidized by temporary service providers that desperate hospitals and nursing homes are forced to use for staffing. Our local hospital lost $5 million last year attributed to the high labor costs, and nursing homes have shut down wings. Service at my local auto dealership has deteriorated, with three week’s wait to get my truck in to be fixed, because they cannot find shop mechanics. My young son, an auto detailer, sent out resumes and was told to just show up for work without an interview. He had lots of choices for jobs. If you have a pulse and can find the business, you are hired. He took a great job with what I thought was great pay at Okoboji Classic Cars here in the Lakes region. A friend in construction sold their family business because they were tired of struggling to find and keep employees. It is the same in agriculture. Technology cannot happen fast enough to compensate for the shortage of labor. Be careful what you ask for. If and when they ramp up deportations of undocumented immigrants there will be businesses shut down as a result. Many are puzzled as to why there is such a worker shortage. I will try to answer that in an upcoming series of reports dealing with that subject.