Commonwealt
National Bank
Serving The Agricultural Community of South Central Pennsylvania
THE FARM PICTURE®
MILK SITUATION AND OUTLOOK —The basic production and price trends look about the same in 1972 as they
were in 1971. Total milk production is expected to increase about 1 percent for the year, as a 2 percent gain in output
per cow more than offsets a small decline in cow numbers. Dairymen have the largest supply of herd replacements
since 1960, the labor situation is not as tight as in recent years, feed costs are lower and milk prices are at a record
high level. Although anything is possible, don’t bank on an increase in support prices this year.
IMPORTS OF DAIRY PRODUCTS-One of the tough
est problems of the dairy industry is getting the import
export situation m balance. At the present time, imports
of dairy products are outrunning exports about 3 to 1.
The U S market is attractive to dairy producers in for
eign countries for several reasons World supplies are
large European nations subsidize their exports Prices
in the U.S. are supported at relatively high prices
DAIRY STEERS There’s not much letup m sight to
the strong demand that has pushed feeder cattle prices
$5.50 to $6.50 over a year earlier. Your dairy steers
rank high in feeding profit potential, should sell well.
BEEF COW HERDS Demand for calves wiU be strong
for a long time The growing population wants and will
pay for quality beef Feedlots will have to finish more
cattle that will have to come from expansion of cow
herds No longer can fed beef supplies be increased
much by feeding a higher percentage of the calf crop
FED CATTLE Look for some downward pressure on prices during the next 60 days Marketings are estimated 4 to
5 percent above a year ago, and cattle are going to slaughter a bit heavier There are no big price breaks m the pic
ture. Demand for beef has been good all along and it will be getting stronger with the improvement in the general
economy But the fed cattle market will show an easier trend because of the increase in supply
HOGS Prospects are good that you will see some price strength in the hog market during January and February.
Slaughter will be down from the November-December period, 7 to 9 percent below last January-February. This is the
result of the cutback in June-August farrowings. Prices should range between $20.50 and $22 for butchers weighing
200 to 240 pounds. Buying feeder pigs looks profitable at recent price range of $l7 to $2l for 40-pounders.
POULTRY —Egg profit prospects look moderately brighter in 1972 —especially the last half of the year Costs will
be down, and egg prices a little higher Broiler prices the first half of the new year will be about the same as in 1971
Supplies will be up a little but there will be less competition from pork. Turkey prices should run above a year ago
during the next 6 months. Lower feed costs likely will bring some increase in production.
CORN Disappearance in the year ahead may reach 4.75 billion bushels —up from 4.45 last year. Even if that much
more com is used, the 1971 crop of about 5.5 billion bushels means a record increase in carryover of about 800 mil
lion. The loan redemption rate will be a ceiling on corn prices between $1.15 and $1.20 per bushel in terms of July
futures. Cash corn prices will rise toward the loan redemption rate as the storage season progresses, but futures are
likely to decline. Now is a good time to buy corn you will need for feed this winter.
The 1972 crop corn future* are about 20 cents above the net loan level. This implies a bigger acreage cut than is
likely under the feed grain program. It looks like corn supplies will be large for quite awhile.
OATS AND BARLEY Combined supplies are slightly below a year ago But prices will be tied to corn. Sell
WHEAT —The big 1971 crop and prospective use in the year ahead add up to a very large increase in the carryover
next summer. A sale above the loan rate will prove to be a good one This holds even though the big surplus is in hard
spring wheat which tends to take some of the pressure off the Chicago and Kansas City markets for wheat
MILK PRICES
5 PE* CWT
1971
S
6 00
5 00 - £/
4 50
4 00 1961-65
350 U; i 1 1 I 1 ;
JAN MAI MAY JUIY SEPT NOV
U S DEPT OF AGRICULTURE
‘A
JANUARY 1972 L
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