BY THOMAS JURCHAK Lackawanna Co. Agent SCRANTON (Lackawanna Co.) December 15, 1989 - Farmers never gel tired of hearing of increasing prices over and over again so I’m sure you’ll be happy to hear for the eighth consecutive month that the Minnesota Wiscon sin Price Series has taken another leap to $14.69 for 3.S bulterfat in November. These aren’t just the usual seasonal increases expected at this time of the year but gigantic leaps of record proportions. Last month it was an increase of 82 cents which in itself was a record as well as the third consecutive month for a record high M-W price. Since March this makes a total of $3.71 in price increases in the M-W which is now $4.34 O ATTENTION fPO EGG PRODUCERS^ With Big Dutchman, Favorite, Or Diamond Three Tier High Cage Systems Has Developed A Four Tier High Cage System That Can Be Installed Within Your Existing Building And Increase Your Bird Capacity By 33% With Minimum Changes To Your Existing Building 4 Tier High Cage System With Ultraflo Feeding System SUMMARY Call Or Write For A Free Estimate And Learn Why uiQx Cage Systems With C3P. Ultraflo Feeding Systems Are Being Bought And Installed More Often Than All Other Cage Systems Combined. Also Check With Us For Your Nipple Waterers, Egg Belts, Moba Packers And All Your Poultry Equipment Remodeling Needs. , Authorized Master Distributor agri systems Hortl Milk Market News above the support price for manu facturing grade milk. Because of a two-month lag in reflecting the M-W in the Class I price, which doesn’t happen with the Class II price in Federal orders, you now have the unheard of situation where the Class II price for No vember will higher than the Uni form or blend price was in Octo ber. It also pushes record high Class I prices for the third conse cutive month to $17.24 in January. That’s $2.27 above the old record of $14.97 set in January 1985 in Order 2. All of this should give you some perspective on how high is high when we’re talking milk prices today. Forecasters all agree that this pace of price increases can’t keep up for much longer but how soon and how far the drops 73.5” Cage Row Width Savings Over Building, All New 80,000 $260,000 Layer System NORTHEAST AGRI SYSTEMS, INC. FLYWAY BUSINESS PARK 139 A West Airport Rd. Lititz, PA 17543 (717) 569-2702 will come is still speculative. If we look at some of the reasons for the increases we may find some clues about when to expect the decreas es. It isn’t enough to say it’s a tight supply demand situation but that is the reason for the increases. The better question is why tight supply and why increasing de mand? The tight supply situation wasn’t just a matter of less milk but more importantly when and where. The drought of 1988 in the Midwest didn’t help milk prices. In fact it only increased feed prices but milk production nation ally kept going up in spite of the drought. It wasn’t until the spring of 1989 in the Upper Midwest • Ideal For New Construction Or Modernizing Older Cage Houses • Boosts Density Of Old Stair Step Houses By Up To 125% Or More • Famous Galv-A-Weld Cage Construction With 10-Year Pro-Rated Warranty COMPARISON COST TO REMODEL VS Row <ht BUILDING ALL NEW All New 80,000 Bird Layer System Building, Equipment, Electrical, And Generator - Complete Turnkey Package Cost $6.25/Bird Existing Big Dutchman, Favorite- Or Diamond 60,000 Bird Layer System Approximately 8-15 Years Old - Complete New Remodeling Costs For Cages, Feeders, Waterers, Collectors, And Building Remodeling Approximate Cost $3.00/Bird New 80,000 Layer System $500,000 Less Remodeling Cost - 240,000 fW/f TIGHT SUPPLY Lancaster Farming, Saturday, December 30,1989-A43 specifically in Minnesota and Wisconsin that milk supplies began to change and prices started up. Mainly it was the quality and quantity of forage available in that two-state area last spring that real ly dropped milk production and cut into supplies. It was important that this drop in production came in Minnesota and Wisconsin rath er than somewhere else in the country because that’s where our milk prices start. DEMAND INCREASES Because the demand increases, particularly for cheese and pow der. came at the same time as the production decreases you got the big monthly price increases be tween 43 and 82 cents. More im portantly, however, were the rea sons for the new demand. After STORE HOURS: MotvFrk 7:30-4:30 OPEN SATURDAY BY APPOINTMENT the year end holidays in 1988 buy ers left the market for three months expecting to rebuild their inventories during the spring flush of milk. The M-W price dropped $1.29 from December to March before the buyers came back in the market only to And there was no spring flush. With cheese con sumption increasing at an annual rate of eight percent, partly be cause there were no more give away stocks, they had to compete for smaller supplies of milk. Cheese prices rose from $1.13 in March to $1.54 in December. Be cause Minnesota and Wisconsin make 60 percent of all the Cheddar cheese in the country and because milk production was down in that two-stale area, the ripple effect was felt all the way to northeastern markets where milk is priced on the M-W price. If that was the whole story we still wouldn’t have prices as high as they arc. To the increasing cheese demand we have to add the increasing milk powder demand. This came because of the export opportunities provided by milk production quotas put on Euro pean dairymen four years ago. At that time they had mountains of powder as well as butter that had accumulated through their subsid ies much the same as we had here at that time. The difference was that their government would sub sidize the export of dairy products as well as the production. We gave ours away at home. They sold theirs at bargain prices as exports. This drove the world price down below our support prices and we couldn’t compete until we wrote some export subsidies into the 1985 farm bill. More importantly, the European surpluses were gone because of their production quotas and we could now sell to interna tional markets. Powder prices rose from 79 cents in March to $1.50 in November with spot market prices going to $2.50 including shipment from California to eastern cities. Again with the year end holi days behind us it’s expected that cheese buyers will back off after December to wait for another spring flush. If cheese prices drop 12 percent as they did last winter they will go from $1.54 to $1.35 or a loss of 19 cents which is worth $1.90 on the milk price. Chances arc that it will be more than that before buyers are ready to go back in the market and they may be helped by a drop in the (Turn to Pago A4S) 8 Meat Pens 32-36 Rabbits Total (814) 349-5816 for information THAT’S NOT ALL WHAT NEXT
Significant historical Pennsylvania newspapers