A32-Lancaster Farming, Saturday, December 24,191
LACKAWANNA (Scranton)
This year dairy farmers should
have no trouble convincing their
children or grandchildren —'
that there really is a Santa Claus
when they see the numbers on
their December milk checks and
know that they will go even higher
in January. All of that because of
another jump in the Minnesota -
Wisconsin Price Series to $12.23
in November. That’s another 35
cent increase in addition to the
$1.55 you already got making a
total of $1.90 worth of increases
since April and $1.71 of that com
ing in the last five months.
Cheese and butter prices
haven’t changed since last month
with butter still selling at two
cents under the support price and
cheese at 17 cents over supports.
At least they’re holding steady
without any cuts as the distribu
tion pipelines get Oiled up for the
holidays. Milk production, on the
other hand, keeps going up and is
now two percent over last year and
heading for a new record by the
end of this year. Non fat dry milk
powder prices are still on the
increase because of the same
export opportunities they’ve
enjoyed for several months. Now
powder prices are 16 cents over
the support price with no Com
modity Credit Corporation stocks
to slow them down. Right now it’s
only the powder price that con
tinues to exert a demand pull on
the M - W but the question is
how long can it last?
Most of the people who work at
forecasting dairy prices underesti
mated the 35 cent increase in the
M - W last month and so far I
haven’t heard any estimates for
December. Part of the problem is
the difficulty of predicting the
reaction in other countries to the
rising international price of pow
der as well as changes in the value
of the dollar which may be even
more important. Since the
increases of the last six months
have surprised many people it’s
very difficult to predict how long
they will last. My only advice is
don’t spend all of your money
on Christmas presents.
Unique Situation
The whole dairy marketing situ
ation is so unusual right now that I
haven’t found anyone who has
seen anything like it in the past. So
don’t be too critical of the forecas
ters who are expected to come up
with predictions at this time of the
year. Never before have we had a
rising M - W price with no CCC
stocks to “stabilize” market
prices. Never before have we had
an M - W $1.90 over the support
price and still accumulating sur
plus CCC stocks. In this case, but
ter is the problem with uncommit
ted CCC inventories double what
they were a year ago. Never
before have we been able to capi
talize on production quotas in Eur
ope that helped to open up foreign
markets for us. Never before have
we seen such a wide spread
between butter and powder prices
with butter prices falling and pow
der prices increasing. If we could
only make powder without mak
ing butter.
While it’s not unique it’s very
unusual to have cheese prices
higher than butter prices and milk
production per cow increasing at a
two percent rate when the milk
price - feed price ratio was down
to 1.34 compared to 1.65 a year
ago. This in spite of a drought in
some areas during the growing
mm am mm
season. It will be unusual to have a
record high milk production year
with cow numbers the lowest in 25
years, at least. So, with all these
unique and unusual situations it’s
no wonder that outlook reports
from government and industry are
being rewritten monthly as new
information is pumped into the
system that produces the predic
tions we use for future guidance.
However, the most important
‘unusual” situation is Congress
writing the dairy provisions of a
tew farm bill when milk prices are
an the rise and CCC stocks the
lowest in ten years. They could
interpret this to mean the system is
working so if it ain’t broke don’t
fix it. And who could blame them.
When Secretary of Agriculture
Richard Lyng spoke at the annual
meeting of the National Milk Pro
ducers Federation recently, he
suggested that producers voluntar
ily give up the 50 cent increases in
the support price for three months
next spring that was written into
the Drought Assistance Act. He
reasoned that you won’t need it
anyway because of higher market
prices and it would give you a
great bargaining chip to negotiate
a kinder and gentler dairy program
in the farm bill next year. With the
General Accounting Office
viewing the present dairy market
as a good opportunity to dump the
milk price support program,’ some
feel that the Secretary may be
right but so far we haven’t found
anyone to “bell the cat.” Just
another unusual situation.
Annual Meeting
This month the Regional
Cooperative Marketing Agency
with 22,000 members held its sec
ond annual meeting and that in
itself is significant because some
people were laying bets that the
first annual meeting would be the
last More significant at the meet
ing was the impression of a vigor
ous, determined organization that
had corrected many procedural
problems this year and was clear
about its efforts and goals for the
year ahead. It’s record of $34 bil
lion in over order premiums since
September 1987 at a cost of only
1.5 cents per hundred of milk to its
members; its increasing member
ship at a net rate of 46 independent
dairymen per month (31 more
were approved at this meeting); an
addition of eight more coopera
tives with a total of 778 members
and 539 million pounds of milk;
the increase in staff from three to
13 to improve member services,
accounting procedures and legal
counseling; the adoption of bylaw
changes to reinforce the principle
of no dues or assessments of mem
bers and finally the accumulation
of a tax free contingency fund of
$908,000, were all signs of an
organization that was here to stay.
However, it recognizes the prob
lem that only 500 producers are
severely limiting its growth and
benefits but is confident that it will
be resolved in the future. All of
the incumbent officers were re
elected and only one change was
made on the executive committee
indicating a member satisfaction
with their past performance and
giving the present administration
another year to continue its work.
Bottom Line
So, with all that good news
about the highest M - W price in
three years caused by a demand
pull on cheese and powder prices
what will be the numbers on the
milk check that will prove there
really is a Santa Claus? You’ll
have to go back to January 1985 to
find a blend price in Order 2 to
match the $13.18 that you’ll get
for November. That’s a $2.52
increase since June of this year
which was the lowest month since
July 1978. Rarely has there been
such a large increase in such a
short time and it all came from the
market price and not from support
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I Would Like To Extend Our Warmest Wishes |
| To Our Farming Community |
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i A Joyous Holiday Season i
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| A Happy, Healthy and Prosperous Year J
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prices. Compared to last month
November was only 24 cents
higher but there was a 17 cent dif
ference in your Louisville Plan
pay back so the market price was
actually 41 cents higher. That
came from a 35 cent increase in
the Class n price from the Novem
ber M - W and a 40 cent increase
in Class I price from the Septem
ber M - W price. By January the
agri
systems
Glory to God
in die highest
To Our Friends:
The year 1988 has almost come to an end and we
again need to remember our valued friends who have
been so loyal to us this year.
It is with joy that we look forward to Christmas and
again remember that God sent His best to bring light
and Salvation to man.
The friendship of those we serve is the foundation of
our progress and we sincerely wish to express a
special Holiday Greeting of health, happiness and a
successful 1989.
May the true Glory of Christ be in your Christmas
Season and be a part of your experience throughout
the New Year.
RIGIDPLY RAFTERS, INC.
Order 2 Class I price will increase
another 75 cents to cany you into
the New Year to pay for the pre
sents so have a Merry Christmas.
4m?
Yours truly,
701 E. Linden St.
Richland, PA 17087