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China Spends $60 Million on Relief, Braces for More Snowstorms

Chinas government allocated $60
million in relief funds to ensure food supply, relocate families
and restore transportation, as the country braces for more
blizzards during next weeks Lunar New Year.

Food supplies will be carried toll-free until March 31,
while the government ensures at least 40,000 tons of thermal coal
can be moved daily to meet 10 days of demand by power plants,
officials said today. Troops will help to clear roads while
airlines and rail operators add services to free up millions of
stranded travelers.

“I can assure you that all government departments are doing
all we can to help passengers get home, in a country where 2.18
billion trips are expected to be made during the six-week travel
season around the Lunar New Year, the National Development and
Reform Commissions spokesman Zhu Hongren said today.

The heaviest snowfalls since 1954 brought down electricity
cables and disrupted coal shipments to power plants, causing
outages in half of China and forcing smelters, carmakers and
manufacturers to halt production. Blizzards crushed houses,
destroyed farmland and disrupted air, rail and road transport,
leaving millions of travelers stranded.

More snow and sleet will blanket southern and eastern China
in the next three days, the weather bureau said today,
compounding economic losses that have risen to 53.8 billion yuan
($7.5 billion). Snowstorms may reduce the economys 2008 growth
by 0.3 percentage point while adding 0.5 point to the highest
inflation rate in a decade, Credit Suisses chief Asia economist
Tao Dong said in a research note today.

The government set aside 431 million yuan in relief funds,
the civil affairs ministry said. The impact of the snowstorms on
the overall economy, which expanded 11.4 percent last year, will
be short-lived, officials said today.

“Such a disaster will be a temporary one and therefore it
effect on the Chinese economy will be a short one, Zhu said.

Stuck in Guangzhou

Up to 400,000 people are still stuck at the railway station
in southern Chinas Guangzhou city, as onward train services to
central and eastern China were blocked by blizzards. The city,
where Honda Motor Co. operates a car assembly, had up to 800,000
stranded travelers earlier this week in the countrys biggest
transport logjam.

Rail services resumed, with capacity to carry as many as
500,000 passengers a day, Ministry of Railways spokesman Wang
Yongping said today in an interview on state television.

Travelers driving north from Guangzhou are offered a 200
yuan gasoline subsidy to detour around the Jingzhu expressway
that connects the city and Zhuhai with Beijing, Xinhua News
Agency reported. About 12,000 vehicles and 37,000 people are
still stranded on the expressway because of snow and ice, it said.

The aviation regulator grounded 3,250 flights around the
country since Jan. 10 while 5,550 flights were delayed, said the
Civil Aviation Administration of Chinas transport director
Wang Ronghua.

Flights Grounded

Storms have incurred China Southern Airlines Co. more than
100 million yuan in losses, as the countrys largest carrier had
to add 128 flights to clear its backlog of passengers, the
Guangzhou-based company said today.

President Hu Jintao yesterday ordered the coal industry to
ensure supplies were delivered to power plants. Half a million
troops were mobilized in the countrys largest peace-time
deployment to clear ice, rebuild houses and restore power lines.

The death toll from the snowstorms since Jan. 10 rose to 60
as people were crushed in buildings and killed in road accidents,
the Ministry of Civil Affairs said today.

The payout by insurance companies may be up to 3.5 billion
yuan, after having paid 350 million yuan in claims as of Jan. 31,
Wu Dingfu, chairman of the China Insurance Regulatory Commission
said in a Webcast today.

Livestock Killed

“Vegetable prices have risen to a record, Xu Xihe, a
spokesman for the Ministry of Commerce, said on state television
yesterday. Snow also damaged 8.4 million hectares of produce in
17 provinces, according to government statistics.

About 15.8 million livestock, including 874,000 pigs and
14.4 million domestic fowls, have died in temperatures that
plummeted to the lowest in five decades, Chen Weisheng, an
official of the Ministry of Agriculture, said in a Webcast.

Storms blocked food shipments leading to price increases and
concern that inflation, already running at double the central
banks annual target, may accelerate.

“We may not have seen the worst yet, said Wang Tao, head
of Greater China economics and strategy at Bank of America Corp.
in Beijing. “The government has really mobilized a huge effort
to deal with the storms, but we will have to wait and see how
effective they are.

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Ag Economist Expects Robust Improvement Of Cattle Prices By 2010

The beef industry has suffered one of the most dramatic negative impacts from the general economy but could experience an equally dramatic recovery when the economy rebounds, said a Purdue University agricultural economist.

Improvement Live “As beef cow numbers continue to drop, beef exports continue to improve and the world economy begins to heal, the magnitude of price improvement may be robust by sometime in 2010,” said Chris Hurt. “A return to finished cattle prices of $1 per pound or higher seems probable as per capita beef supplies will be low and competitive meat supplies will drop as well.”

Last summer finished steers were expected to average about $94 per hundredweight in the first quarter of 2009, Hurt said. Improvement Live As the economy weakened, cattle prices fell and averaged only $81.50 in the January to March quarter. That’s $12.50 per hundredweight less than expected.The Purdue Extension agricultural economist said that finished cattle prices are moving almost in lock step with the U.S. stock market.

“Using weekly data since September, the Dow Jones Industrial Average index and finished cattle prices have had a correlation of nearly 90 percent,” Hurt said. “Of course the stock market doesn’t determine cattle prices, but they have both been influenced by macro economic conditions, which reflect weak demand.

Because of seasonal tendencies, Hurt’s not sure these higher prices are here to stay. He expects finished cattle prices to average somewhere in the mid-$80 range during the second quarter and then during the summer months increase a couple of dollars.

“For example, Improvement Live in the first quarter of 2009, retail beef prices averaged $4.33 per pound compared to $4.16 a year earlier,” he said. “In contrast, Nebraska finished steer prices were about $81.50 in the first quarter this year compared to $89.60 a year earlier.

“While live cattle prices were down $8.10 per hundredweight, consumers had to pay 17 cents more per pound for beef.  This means beef marketing margins increased, with the largest portion going to the retailers’ margins, which were 13 percent higher than in early 2008.”

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Sales Of Jackson Area Homes Up In 2018, But Prices Down

They’re trading their small home off Park Road in Summit Township for spacious living quarters off Walcott Road in Blackman Township.Although they’re getting a great deal on their new digs — spending $185,000 for a foreclosed house they figure would be worth about $300,000 in a better seller’s market — the Coopers are struggling to sell their other house.Home Realty It’s listed at $99,800 — $25,000 less than they paid for it six years ago.

“We figured if we got a good enough deal on a larger house, then we would be willing to take a loss (on the sale),” said Allison Cooper, 31, a computer programmer at Consumers Energy.The average listing and sales prices for Jackson-area homes were down in March from the same month in 2008, continuing the downward trend in recent years. The average house, condominium or farm was listed at $124,082 last month, with an average sale price of $69,269, according to figures compiled by the Jackson Area Association of Realtors Multiple Listing Service.

Home Realty But as the spring home-buying season gets under way, area Realtors said they’re seeing some positive signs. Among them: an increase in the number of residential sales and renewed interest in homes in the $100,000 to $200,000 price range. The average sales price climbed nearly $16,000 from January to March.

“I believe that the buyers are out there with the stimulus plan (tax credits) for first-time buyers,” said Kim Gibbs, manager of Exit Realty 1st at 437 Fern Ave. and the president of the Jackson Area Association of Realtors. First-time home buyers get a tax credit of 10 percent of the purchase price, with a maximum credit of $8,000.

The glut of foreclosures means homeowners shouldn’t think of selling unless they must, Gumbert said. “If you haven’t lost your job or are in the middle of a divorce, if it’s not an estate, your house should not be on the market unless you are in a position to compete with the deals out there.” Home Realty But he also has seen greater interest recently in more expensive homes that are reasonably priced, including homes on lakes. One good sign: Some sellers are finding buyers as soon as they put their homes on the market, he said, which hadn’t been happening with nonforeclosures.