The Milk
Check
TOM JUROHAK
County Agent
BY TOM JURCHAK
Lackawanna Co. Extenstion
Small Change
After increases in the
Minnesota-Wisconsin Price Series
of 46 cents in August, 50 cents in
September and 40 cents in Octo
ber, the December increase of on
ly four cents may seem like small
change to producers but it was
enough to confound the prognosti
cators and keep dairy product
manufacturers worrying about
their cash flow. Prices are not sup
posed to rise this fast or this long
in the dairy business. Now you
have had eight months of consecu
tive increases in the M-W for a
total of $1.94 and moving the
price from 73 cents under the pre
vious year in June to $1.15 over
last December. That’s a total
improvement of $l.BB in just six
months. The M-W is influenced
largely by Cheddar cheese prices
which are still 21 cents above the
support price with no signs of
dropping. Not all processors sell
cheddar cheese but all processors
liave to compete for the milk sup
ply even if they’re making butter
and the price is two cents under
the support price. Don’t worry that
the January Class I price in Order
2 will be $14.78 and the out-of
store price in northeastern Penn
sylvania will be $2.31 a gallon or
33 cents more than last January.
We can live with that. But with all
the mix of manufactured dairy
products that are affected by the
M-W your good fortune of rapidly
fuHOLLINGER’S
—' Lam & Garden Equipment
2274 New Holland Pike
Lancaster
656-2710
FINANCING AVAILABLE ..HOLLINGERS IS THE DIFFERENCE
increasing prices is not viewed as
a blessing by everyone. if you i oo k back on 1988 you
However, cheese and powder had a record high year in produc
prices remain strong and even tion per cow; in total production
dried whey and buttermilk prices j 3 nd in commercial sales. All of
have caught fire to help out. As of this with a record low number of
now, there’s no indication of cows and a3O percent increase in
changes in the cheese and powder government purchases. That has
markets but with an increase of been the long term trend of the
only one tenth of what you have industry with only an occasional
had in the recent past some blip from a diversion program or a
changes are taking places. Hope- whole herd buyout. So, if you’re
fully, it’s just a pause before playing the odds, the current
prices move ahead again but esti- jumps in prices from a demand
mates are nearly impossible p U n on a few dairy products may
because the situation is so unique. be on i y another blip resulting
Here we have cheese and powder from economic forces from out
prices at 120 percent of the sup- s ide the dairy industry. If that’s
port price but CCC purchases the true then the present situation will
first week of January were the change and revert to its normal
highest since last May at the peak trend even by the end of 1989. In
of the spring flush. It’s a good that case your average price for
time to bring out the old discus- the year without any consideration
sion topic “Is there really a sur- 0 f premiums may be only slightly
plus?” You can have fun with that higher than 1988 but over order
one now. premiums will make the differ-
Foggy Balls
So, having said all that, the time
has come, as it does every year,
for forecasters to predict what lies
ahead except that this year the
crystal balls are as foggy as
enyone can remember. Those who
made predictions before the end of
the year - like the USDA - are
likely to change from them if they
had another chance now. Fore
casters interested in getting more
milk for their employers were
more optimistic than those whose
income would not be affected. Fhe
problem is that either group could
be right so you’ll have to make a
1755 W. Main St. 1515 E. Chocolate Ave.
Ephrata Hershey
738-1131 533-4060
choice. If you want to go with a
consensus decision don’t bet the
farm that the present situation will
last beyond next spring. It’s easy
to predict that milk prices the first
half of 1989 will be better than the
first half of 1988 for two reasons.
Last spring they hit a ten-year low
and we are starting 1989 at a three
year high and going up. If you stay
with the consensus decision you
can expect prices the last half of
1989 below what you had in 1988,
which means that most forecasters
don’t expect the present prices to
continue for long. That may be
true.
cncc. If the last six months didn’t
stimulate you to go for over order
premiums through RCMA or
otherwise then 1990 will look
much like 1987.
How Come
So, if milk prices arc so good
now how come the December
blend price in Order 2 was 11
cents lower than November? It
POURED REINFORCED CONCRETE
CONSTRUCTION
SIZES AND LAYOUTS TO YOUR SPECIFICATIONS
Groffdole
concrete walls, inc.
148 BRICK CHURCH RD., LEOLA, PA 17540
(717) 656-2016
Lancaster Fanning Saturday, February 18,1989-029
dropped from $13.18 in Novem
ber to $13.07 in December mainly
because you had a Louisville Plan
pay back of 26 cents in November
which was the last one for the
year. Without the 26 cents in
November the price would have
been $12.96 so you got an
increase of 11 cents in the market
price but it didn’t show up that
way on your milk check. Another
factor is the increasing receipts
which jumped four percent on a
•daily basis in Order 2 from
November to December lowering
the Class I utilization. The Class I
price increased 40 cents ever last
month and the Class II price omy
four cents so the lower proportion
of fluid milk was expensive. If
you’re interested in learning more
about how federal order milk pric
ing works you should plan to
attend one of the educational
meetings in your area being
arranged by Cooperative Exten
sion and the milk marketing
cooperatives starting January 19
in Pennsylvania, New York and
New Jersey. Call your Extension
agent for dates and places.
New Secretary
Seldom has there been such
universal support for a new Sec
retary of Agriculture as George
Bush got in the appointment of
Clayton Yeutter, (rhymes with
fighter), who is anything but new
to agriculture and the Department.
A com and cow farmer from
Nebraska with a law degree and a
doctorate in ag economics, he has
already served under three presi
dents. He administered the federal
milk marketing orders back in
1969 and later was assistant sec
retary for marketing and consumer
services. He is best known for his
present job as U.S. Trade Rep
resentative, the top job in interna
tional trade for President Reagan
since 1985 where he developed a
reputation as a tough negotiator.
Naming Yeutter to head the
Department has sent a message to
all agriculture that the strategy of
the new administration will be
market expansion rather than
supply management.
■//:<
J 1
0 0
Is your
water
as dean as
it looks?
Vbacieria
'/NITR/OES
Vlead
VCHLOROFORM
Your water
.could contain bacteria and'
1 chemicals that you can't ]
> see taste or smell '
\ But they could threaten *
> your family's health ]
I The Aquafier™ '
[ water purification <
' system can ensure that the]
- water your family drinks <
is pure
Call today for more
information
DICK CLAYBAUGH
154 S. Third St.
Mt. Wolf, PA 17347
717-266-1914