808 YONKERS Assistant Prof., Ag Economics Penn State University STATE COLLEGE (Centre Co.) For the dairy industry, 1992 was a change from the con ditions of 1991. Slower milk production growth, coupled with some increased de mand, resulted in relatively strong milk prices in the first half of the year. Milk prices remained at or above year-eariier levels through October. Milk Production and Farm Prices Expect milk production to grow about 2 percent in the first half of 1993, driven by a slower decline in cow numbers and continued in creases, albeit smaller ones, in output per cow. I look for this growth to slow in the second half of 1993, with total milk production for the year up one to one-and-a-quarter percent Such growth in milk produc tion. coupled with sluggish com mercial disappearance, will put a lot of downward pressure on milk prices. My outlook for price has the M-W (or its replacement) falling over $2 from the 1992 peak of $12.59 (at 3.5% BF), to around $10.40 during March and April; still well above support but I see the M-W averaging nearly $1 low er in the fust half of 1993 than for the same period in 1992. For the second half of 1993, I see a different story. Sluggish milk production coupled with (I hope) more evidence of growth in the U.S. economy stimulating de mand, will result in strengthening milk prices. I look for the M-W to peak by October at $12.60, about the same peak as in 1992, with second half milk prices averaging slightly above the same period in 1992. Under my scenario, the average annual all-milk price in 1993 will be nearly SO cents lower than 1992. Consumption and Trade Domestic demands for dairy products were unsteady in 1992, but overall are expected to in crease about 2 percent. Of some concern has been the sluggish demand for fluid dairy products. Increased sales for cheese and nonfat dry milk ac counted for most of the commer cial sales gains in 1992. Retail prices for dairy products are expected to ease in the first half of 1993 as farm milk prices Dairy Outlook For 1993 decline. Favorable retail prices should encourage growth in com mercial sale; the big question is whether or not the economic re covery in the U.S. will support in creased buying by consumers. It is hoped that the new Clinton Administration will lead to some economic optimism early in the year. Another plus for the dairy in dustry recently has been the in creased use of the Dairy Export Incentive Program (DEIP), This government program sub sidizes the export of dairy pro ducts, and 1992 DEIP contracts accounted for nearly 2 billion pounds of milk. One reason for DEIP interest has been lower milk production in the European Community and the emerging democracies of Eastern Europe. Interest in this program will l&ely remain high in 1993 as U.S. traders have become accustomed to the program. However, most trades to developing countries hinge on their ability to obtain credit. Factors Influencing The Outlook Some keys to this outlook in- Lancaster Farming, Saturday, January 30, 1993-A27 elude the fact that I do not believe that forage quality and quantity across the country are as poor as • some claim; below average for sure, but not poor. I do expect lower grain prices, especially for com, to keep the milk:feed price ratio from falling too far. I also expect a change in the CCC butter purchase price (with a corresponding change in the non fat dry milk price), which will stimulate increased export sales of butter and butteroil. I do not look for any major changes in dairy policy, with the exception that there is an outside Grange Leader’s UNIONVELLE, Md. Nearly 70 Grange leaders attended the Maryland State Grange Leader’s Conference held recently here at the Linganore United Methodist Church. Leaders from around the state participated in workshops led by the state master, state lecturer, state secretary, state women’s activities chairman, state youth and junior leaders, and state deaf activities chairman. CHARGE-A-MATIC 6-8-12 Charger or 12 Volt Only | MOUNTING f ifi") / W/ jJ J PLATE 'V Vrklnst -is AVAILABLE AT ADDITIONAL J * Regulator controlled. co ®* ' A/ • Manual switch to , ' overcome the slow L3LJ We finish charge, (upsj ®J” • Polarity protected. PEQUEA BATTERIES 1038 - NORTH RONKS RD. RONKS, PA 17572 717-687-0880 chance that legislation will pass increasing the support price SO cents. However, this would not go into effect in time to prevent the M-W falling below $10.60, but may re sult in higher milk production than I forecast in the second half of 1993, and therefore an M-W peak below $12.30. Finally, I am tired of hearing hints every year that bST will be come commercially available “next year,” so my standard com ment has become “even if bST is approved next year, the effect of this technology on milk produc tion and prices will be very small in the first year of use." Conference Held Dates for upcoming events were set and leaders were apprised of programs for the coming year. The following 1993 dates and events were annouced: • State Youth Night, March 27. • Mid Atlantic Lecturers Con ference, Painted Post, New York, May 14 - 16. • Slate Grange Picnic, July 25. • State Talent Contest (includ ing juniors), August 14. • State Grange Junior/Youth/- Family Camp, Wolfe Farm, St Mary’s County, September 24 - 26. TOWN AND COUNTRY POURED WALLS • Manure Pits TIE • Retaining Walls • House Basements • Trench Silo Walls (215) 593-5794 Ask For Ike
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