A3O-Lancaster Farming, Saturday, December 20,1986
Support Price Drop To Have No Net Effect On Dairymen
UNIVERSITY PARK - On Jan.
1, 1987, the milk support price will
be cut by 25 cents. Yet, dairymen
will not notice the drop due to a
strong Minnesota-Wisconsm price
which registered 60 cents over the
$11.31 milk support price in
November, according to Jack
Kirkland, Penn State dairy
marketing specialist.
He added that the M-W price for
November 1986 of $11.91 was up 6.5
percent from the November 1985
level of $11.19. The all-milk
wholesale price in Pennsylvania
registered a similar jump from
$12.47 per hundredweight in
November 1985 to $13.28 in
November 1986.
The milk/feed ratio, a measure
of how well dairymen are doing,
reached 1.75 for Pennsylvania
dairymen for the quarter ending in
November. The breakeven point,
or no profit, ranks at 1.3, according
to recently released USDA
statistics.
This ratio is calculated based on 1985 to 48.2 percent in November
an average price of 16 percent 1986. This figure dropped
dairy ration in the Northeast state significantly from the October 1986
and the all-milk price in Penn- Class 1 utilization of 53 percent.
November Order 4 Milk Set At $13,30
ALEXANDRIA, Va. - Middle
Atlantic Order Market Ad
ministrator Joseph D. Shine an
nounced a November 1986 base
milk price of $13.30 per hun
dredweight and an excess milk
price of $11.89.
The weighted average
November price was $13.28 and the
butterfat differential for the month
was 17.5 cents. The base milk price
was up 10 cents from October and
was 65 cents higher than last
November. The weighted average
price was up 10 cents from October
and was 71 cents higher than a
year earlier.
The gross value of November
producer milk was $67.6 million,
compared to $64.3 million a year
ago.
Shine said that producer receipts
totaled 511.0 million pounds during
November, a decrease of 1.7
million pounds from last
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Revolving field design
Precision machined helical
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Patented long life all weather
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generator overload
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YEAR-END INVENTORY SALE
.40 KW $2,500
USED
EQUIPMENT
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330 Fonderwhite Rd. Lebanon, PA 17042
24 Hr. Service (717) 273-4544 Radio Dispatch
sylvania, Kirkland explained.
“Dairymen should be doing pretty
■ well,” he noted.
Milk prices in the three Federal
Orders covering Pennsylvania
increased as a result of continued
decreases in production and in
creased Class 1 utilization, the
Penn State economist noted.
In Federal Order 2, dairymen
received $14.10, before
assessments, per hundredweight
of milk in November 1986 com
pared to $13.37 in November 1985.
Class 2 sold for $11.97 per hun
dredweight this year as compared
to $11.25 per hundredweight last
year. The blend price increased by
75 cents from last year’s mark of
$12.30. Class 1 utilization in the
New York-New Jersey Order
increased by 1.7 percent over the
November 1985 rate of 43 percent,
Kirkland said.
However, for the same period in
Federal Order 4, Class 1 utilization
decreased from 48.5 in November
November, and the average daily
delivery of 2,620 pounds per
producer increased 63 pounds or
2.5 percent from a year earlier.
Class I producer milk totaled
246.3 million pounds and was down
2.3 million pounds or 0.9 percent
from last November.
Class I milk accounted for 48.21
percent of total producer milk
receipts during the month, com
pared with 48.49 percent in
November 1985.
Base milk accounted for 91.58
percent of total producer milk
receipts in November compared
with 88.11 percent last year. The
average butterfat test of producer
milk was 3.84 percent, up from 3.76
percent last November.
Middle Atlantic Order pool
handlers reported Class I in-area
milk sales of 205.0 million pounds
during November.
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12 KW PTO UNIT
“This is the first time in several
months that the utilization has
been lower than the previous
year’s,” Kirkland said. He added
that the decrease from 1985 to 1986
was not significant.
Prices in Federal Order 4
continued the upward trend of
previous months. The Class 1 price
increased from $13.88 in November
1985 to $14.56 in November 1986.
Dairymen experienced an increase
of 77 cents for Class 2 milk and the
blend price rose from $12.57 to
$13.28 for the same period.
Dairymen in Federal Order 36
received an increase of 53 cents for
Class 1 milk from November 1985 to
November 1986; for Class 2 and 3
milk, prices jumped from $11.19 to
$11.91. The blend price in the Order
increased by 63 cents for the same
period. Class 1 utilization in
creased by slightly over 1 percent
to 58.5 percent in November 1986.
Cull cow prices registered an
increase from $32.80 per hun
dredweight in November 1985 to
$35 in November 1986, an increase
of 6.7 percent, Kirkland said.
Total milk production in the 21
major dairy states, which produce
85 percent of the milk in the
country, recorded a milk
production of 9.5 billion pounds in
November 1986 compared to 9.8
billion pounds in November 1985 for
a 3.4 percent decrease in
production.
In the reporting states, the
number of cows fell from 9.3
million last year to 8.9 million this
20.000 watte
25.000 watte
30.000 watte
35,000 watte
40,000 watte
45,000 watts
50,000 watte
box
year for a 4.4 percent drop.
However, production per cow
increased by 10 pounds from the
previous year for an average of
1,058 pounds this year. This
average is also down from the
October 1986 production of 1,099
pounds per cow.
Pennsylvania recorded a 2.3
percent drop in total milk
production for the same period,
Kirkland reported. The number of
milk cows in the state dropped
from 745,000 in November 1985 to
735,000 in November 1986. This
number remained constant from
October 1986. Production per cow
in Pennsylvania decreased from
1,130 pounds in 1985 to 1,120 pounds
in 1986, he noted.
Mandatory Supply Management
even though the over-quota penalty
is large.
If quotas were freely tran
sferable or saleable and the
program was not temporary, the
quota would have considerable
value, particularly if the penalty
for over-quota milk was large.
The annual value of the quota
would be capitalized over future
years under these circumstances.
The value of the national quota
under the Canadian program in
1983 was estimated at more than
$2,800 per cow.
If there were equally profitable
alternative uses of the dairy farm,
May God Bless You & Your Family
This Christmas Season & The Year
To Come.
“In December we’ll see even
lower production which will carry
through the year as more animals
go off the market in the buyout
program,” Kirkland said. With the
decreasing number of cows, there
will be fewer calves and
replacements in two years. This
will result in a decreased potential
to expand, he noted.
Kirkland speculated that few
dairymen in the East will be
willing to take on more debt even
though milk prices are favorable.
Pennsylvania dairymen are also
reaching their limits in the number
of cows they can add economically.
In the Northeast, production will
not increase, but the decrease will
be slowed, he added.
(Continued from Page A 29)
the quota could be sold separately
from the farm without subtracting
from the sale value of the farm. If
profitable alternative uses of a
dairy farm were limited, the sale
of the quota separately from the
farm would subtract an almost
equal amount from the value of the
farm.
Therefore, in some cases, the
sale of quotas would result in a
large windfall to the seller but in
other cases it would not. The in
centive to sell quota separate
from the farm would be greater in
areas with profitable alternatives
to dairy farming.
Sincerely,
C.E. WILEY & SON, INC.
Quarry ville, Pa.