012—Lancaster Farming, Saturday, February 6,1982
“Cloudy Sunshine” is ‘B2 dairy, livestock forecast
BY SHEILA MILLER
SCHAEPFERSTOWN - What’s
in store for dairy and livestock
producers in 1982? That was the
question and purpose of a seminar
held here last Wednesday by the
Lebanon Valley National Bank.
Serving as soothsayers for the
fortune-telling session were
Charles N. Shaw, who is the section
leader for the Supply, Demand and
Price Section of the U.S. Dept, of
Agriculture, and Penn State’s H.
Louis Moore, professor of
agriculture economics.
Although most of what Shaw
shared with the farmers and ag
businessmen who filled the local
Fire Hall was no earth-shaking
revelation, he guided the group
through the technical data on dairy
price supports and offered his
dismal forecast for the future.
“Price suppport issues are of
concern to farmers nationwide,”
commented Shaw. In retrospect,
he referred to 1981 as a “year of
uncertainty” in the dairy business.
He explained that farmers ex
perienced an unsettling realization
on April 1 of that year when the
federal government voted to
forego the dairy producers’ semi
annual price support adjustment.
This rude-awakenmg followed on
the heels of three previous years
when the price support was at 80
percent and the semi-annual ad
justments never faltered in raising
the price per hundredweight of
milk.
Shaw reviewed the provisions of
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the Agriculture and Food Act ut
1981 which now allows a fluc
tuating price support based on
Commodity Credit Corporation
purchases. “If CCC purchases
exceed $1 billion, the Secretary of
Agriculture can set the price
support at the minimum,’’ he
stated. "If the purchases are less,
parity will be set at 70-75 percent.”
The USDA economist, however,
did not offer much hope that dairy
producers will see the 75 percent
parity until “production and
commercial use come back into
better adjustment.” ,
Based on current statistics, it is
doubtful that production will take
the nose-dive that the government
is demanding. December’s milk
production was up 3.2 percent from
year ago figures; there was an
increase in cow numbers by 8
percent; and production per cow
increased another 2 percent.
According to December reports,
there werre 11 million cows in the
U.S. dairy herds, noted Shaw —the
greatest number since March 1977.
He attributes this increase to two
factors; the large numbers of
available replacement heifers that
are entering the milking strings;
and the limited culling of cows due
to depressed beef prices.
Instead of a drop in pounds ot
milk nationwide, Shaw predicted
that by December 1982 there will
be a 1-3 percent increase despite
a slowing in gams later in the year.
He cautioned the local dairymen
not to set their hopes and ex-
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pectations on an increase in milk
prices. He predicted the 1982 prices 1
will remain unchanged at $13.19 a
hundredweight with a possible 2
percent increase only “if there’s a
downward adjustment in
production nationwide.' ’
In his analysis of the economic
situation for the dairy producer,
Shaw noted that returns over
concentrate costs will increase due
to lower feed prices, however the
“real value” will be down due to
inflation. That same inflation will
raise the price of milk at the retail
level, said Shaw, pointing out that
“farm to retail cost will make up a
sizable portion of this retail in
crease.”
Increased milk production on the
farm coupled with only a Its
percent increase m per capita
consumption since 1979 has set the
stage for record CCC stocks. In
1981, the CCC purchases came to 19
percent of the estimated U.S.
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marketings at 12.9 billion pounds in
contrast to the 1989 CCC purchases
amounting to 8.8 billion pounds.
The net cost ul the dau'y support
program rang in at almost |2
billion.
Shaw predicted the program
costs “will remain high in 1982.”
He cautioned that "unless there’s a
quick turn around, the October
programmes! estimate will exceed
billion -and dairy producers will
be looking at the minimum pnee
1 support—ll3.2s a hundredweight
less than 70 percent parity.” His
outlook for 1983 echoed the 1982
forecast and Shaw warned that
unless milk production and con
sumption are brought more closely ,
i in line, it will mean another year of
minimum price support
One way to help
TONGU
lOINT
dilemma, Shaw said, would be for
dairy producers to look into
alternative careers either on or off
the farm. But, as Penn State’s Lou
Moore pointed out, as dairy
producers look for alternative
ways to make a living, livestock
producers are looking at dairying
as a way to insure a stable mcome
and get their share at the
"government trough.”
Moore blamed this shift in en
' terprises on several years of un
profitability in the .beef and pork
businesses. The * economic
recessions experienced in the U.S.
during the past two years, sur
pluses, sanctions and embargoes,
interest rates, farm costs versus
income, and record gram crops’ail
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TONNAGE TABLE FOR 8 FT. SIDEWALLS*
' ./.'-I 30 56 50 60“
WIDE WIDE WIDE WIDE
' HR 323 432 540 546
' W 376 504 630 753
S 6 - - 431 576 720 862
' ' flfr J 485 648 808 971
* W' , 539 720 900 1078
416* 593 792 989 1187
; ,1»' 648 864 1080 1296
#0 688 936 1170 1376
I, -lift. 755 1008 1260 1510
TS6' ' 808 1080 1350 1616
(Turn to Page 013)
'BASED ON LEVEL FILL WITH
45 LBS. PER CU. FT.