NFU Must Lead Ag Policy
SIOUX FALLS, S.D.
National Farmers Union must
continue to lead agricultural poli
cy development as the nation
takes a new economic course, Lee
Swenson, the national president of
the farm group told the organiza
tion’s 91st annual convention.
"There are still important issues
that we need to address,” Swenson
said. He encouraged the organiza
tion’s members to continue in the
policy formation process. Among
issues that Swenson said needed
further attention are farm income
improvements, the reorganization
of USDA, international trade
agreements, energy taxation, and
health care.
Swenson said the organization
must move forward in its policy
objectives as the nation downsizes
government and reduces federal
deficits. “We want to be part of
the decision-making process when
the proposed cuts for agricultural
outlays, totalling $2.7 billion are
made over the next four years,” he
said.
The NFU president said the
farm organization is proposing
that farm programs be based on
fanning units, rather than being
doled out according to acreage
allotments. “We must target feder
al support to family farmers,
rather than the corporate farms
and absentee owners who have
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been farming the farm program,”
he said.
Swenson said the organization
had tremendous challenges ahead.
“1992 commodity prices were
lower than they were twelve years
ago. We have lost a quarter of mil
lion fanners in the last decade.”
It was for those reasons that rur
al Americans became involved in
MILK
IH CHECK
THOMAS JURCHAK
, m Dairy Specialist
' I Bx’ I? Lackawanna County
SCRANTON (Lackawanna Co.) After falling 95 cents during
December and January, the Minnesota-Wisconsin Price Series
appeared to be bottoming out, mainly on the strength of rising nonfat
dry milk prices and steady cheese prices in January and February.
Further drops in the M-W were expected but none so severe as in the
past
That’s the way it happened in February, with the M-W falling 15
cents to $10.74. That’s apparently not 100 far from the bottom for this
year. If that happens, the low in March may be a little higher and come
a little sooner than expected.
However, the M-W will still be 28 to 30 cents below the $10.98
price of last March, before it starts the expected seasonal increase dur
ing late spring months.
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the political process, he said. “We
saw a need for change and we led
the charge to elect a government
of change both in the executive
and legislative branches,” he said.
Swenson reported that is
excited about the new U.S. gov
ernment and voiced delight with
the new Secretary of Agriculture
Mike Espy.
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Much of the credit for slowing the fall of the M-W price in February
will have to go to increasing powder prices.
From a December average of $1.09 a pound in the upper Midwest,
the price went as high as $1.16 the last week of February. Powder
prices reached the point where butter/powder plants were competing
with cheese processors for milk supplies.
Export Subsidy
The increase in demand for powder came largely from the Dairy
Export Incentive Program (DEIP). Last year bids were accepted into
DEIP for more than 155,000 metric tons of dairy products.
Seventy-three percent, or 113,000 metric tons of that was on nonfat
dry powder.
Then USDA announced that it would offer DEIP contracts for
204,000 metric tons of powder in 1993, and in January accepted con
tracts for 367 and 1,000 tons of whole milk powder.
The bids were accepted by processors and the powder got made, but
now there are delays in exporting it and powder prices are falling back
to January levels.
Some processors are offering powder out of storage below current
market prices fearing further price drops if exports don’t start moving
soon.
Another export situation to watch is grain shipments to Russia.
Moscow has defaulted on more than $3OO billion of U.S.-backed
loans for grain and other farm products. If we cut off their credit, some
of the 16 million tons we had hoped to sell them may stay here and
affect feed prices.
One of the best things about the dairy industry is that you have so
many products to sell that you don’t have to rely on a single market.
This month you have an example of the benefit of diverse products
and markets weakening powder prices being offset by increasing
cheese prices. That may keep the M-W from falling much more this
spring.
Cheese prices had fallen to a low of Si.l6 by Jan. IS, but never
dropped further because powder prices went up.
Since then, cheese prices have increased 3- and 4-cents per pound to
within 1 cent of what they were at the end of 1992.
After staying flat for six weeks at 51.16, the price of cheese blocks
jumped 3 cents, and barrel prices went up 4 cents per pound, within
two weeks. Those were the first increases since last October.
Some market watchers feel this is too much of an increase and too
soon to be sustained, but that depends mainly on milk supplies. And in
January the milk supplies increased less than 1 percent over last year.
Yet to come is the effect of the “storm of the century” that was
occurring as I wrote this.
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Cheese Prices Up
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