A2O-Lancaster Farming, Saturday, November 24, 1990 Milk Prices Drop Fast, Return To Decade-Old THOMAS JURCHAK Lackawanna Co. Agent SCRANTON (Lackawanna Co.) You won’t like it, but the record breaking season isn’t over yet. After you got used to record high prices during the last 12 months, you are now in for some record breaking lows that started in October. The worst was a $2.02 drop in the Minnesota-Wisconsin Price Series in one month from $12.50 in September to $10.48 in Octob er. The previous record of $1.72 was back in February when it was part of a $2.91 drop in the M-W in three months. After that the increases came slowly totalling $1.41 in four months. Then in August, when prices normally are increasing, the M-W started another decline for a total of $2.95 in the last three months. With the October M-W at $10.48, it makes it the lowest for the month since 1978. That was 12 years ago. Even worse than that is the thought that it’s $3.39 lower than last October. It will also provide a record high difference between Class I and Class II prices in federal orders. In Order 2 in October the Class I price is $15.64 and Class I is $10.54 for a difference of $5.10 between fluid milk and milk used for other dairy products. Unheard of in the past. Of course, the full impact of this record drop won’t be felt until January when you get your check for December milk but brace yourself for a long, cold winter with prices $3.00 under the year before when we get into 1991. The Pennsylvania Milk Market ing Board has scheduled a hearing for the November 19 to receive testimony on adjusting milk prices in response to die “decline in the M-W price series” and the “increase in the costs of crude oil.” What Happened? Last month I said that the 29-cent drop in cheese prices in one month signalled the beginning of the end of record high milk prices, but I never realized the end would come so soon. At the National Cheese Exchange on October 12 prices were at $1.14 for 40 pound blocks, but since then there have been weekly declines totalling five cents until the price fell to $1.09 CLASSIC RAC I R^i^ifi^i , lt’» hsr*— thf 1901 Clastic Tractor Collection, tacond In a series, featuring 14 'painstakingly restofedfarm tractors from the past everyone a classic. Du Pont, Jr. maker of Classic* herbicide for soybeans, proudly presents the 1091 Classic Tractor Collection, a tribute to farm power from the p on November 9 and that’s two cents below the support price. Powder prices that, along with cheese, had helped to keep the M-W above the support price of $lO.lO have now dropped another nine cents. Increasing milk production, particularly in the southeast and southwest, have reduced ship ments from Wisconsin to Florida to a third of what they were a year ago sending 118 more loads of milk a week to processing plants in the upper mid west. In addition, the lower milk price in California, that does not have federal milk marketing orders, has made their cheese competitive in mid western markets helping to lower prices there and add to deal er inventories. So the answer is that market prices for dairy products that set the payment for milk have fallen to price support levels as a result of increasing milk supplies and dealer inventories adequate to meet the market needs through the holidays. Called the “Food, Agriculture, Conservation and Trade Act of 1990” the farm bill takes some ■ GREAT GIFTS ■ ORDER EARLY ■ PONT DELAY r * **• \ iU IVI ■ Baautlful 1991 calendar ■ Handaoma 20” x 30” ■ Fascinating, hour-long vidaotapa Great gina tor anyone with rural roots! CLASSIC CALENDARS. Large 14” x 22” calendar features 14 vintage farm tractors, each in brilliant color, measuring 14" x 10”, suitable for framing. Date pad has writing space for notes. 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Box 1755 • Wilmington, DE 19899 CLASSIC CALENDAR □ @ $8.95 $ CLASSIC POSTER □ @ $4.05 $ Number CLASSIC VIDEOTAPE I I COMPLETE SET Save □ Pottage and Handling Please allow 2 weeks tor delivery TOTAL $ Farm Bill Number @ $10.05 Number e $28.00 Number giant strides away from dairy sup ports as we have known them in the past; fixes the cost on assess ments or user fees on producers and sets a minimum support price. If all else fails, the support price cannot fall below $lO.lO for man ufacturing grade milk (not Class II milk) of average butterfat test or $9.90 for 3.5 percent milk at today’s butler prices. That rolls the support price back 12 years to 1978. To get an increase of 25 cents on the support price, CCC purch ases would have to fall below 3.5 billion pounds of milk equivalent on a total solids basis. Last year CCC purchased nine billion pounds on a milk fat basis so you have a long way to go to get the 25 cents or $10.35 for a support price. However, if CCC purchases are expected to exceed seven billion pounds of milk the USDA could reduce producer prices through assessments to equal the cost of the CCC purchases in excess of seven billion pounds of milk equivalent. Beyofid that, the farm bill requires USDA to solicit propos als through public notice on an inventory management program Only $6.95 Only $4.95 Only $19.95 ORDER Your Name Route, Box or Street . City/Town State 91.50 To order by credit card, . ___ __ _ __ _- call toll free: 1 -800-527-2601 Level and study the effect of alternative classification of milk in federal orders and supporting producer income through target prices and deficiency payments as we now have in feed grains. By August 1991 the USDA is to submit a report and recommenda tions to the agriculture committees in the House and Senate. The bill also requires the USDA to explore alternatives to the M-W as a Basic Formula Price; announce a national hearing on this by October 1, 1991 and have federal orders amended by June 1, 1992 if changes are indicated. Another study on multiple com ponent pricing is required with reports to the House and Senate agriculture committees within 180 days and national hearings to con sider the adoption of such recom mendations in each federal order. Finally, in a separate subtitle, there’s a “Fluid Milk Promotion Act of 1990” that provides an opportunity for a fluid milk prom otion program if USDA receives a proposal for such a program from fluid processors representing 30 percent of the total volume of fluid milk products. (Turn to Page A2l) Zip -v 'lfi* J*
Significant historical Pennsylvania newspapers