A&ft£tKhs£r
Larry G. Hamm
Professor and
Extension Specialist
Dept, of Agricultural Economics
Michigan State University
This is one of those times that
try dairy economists’ souls. We
are accustomed to mising dairy
price forecasts. But when we miss
them by a wide margin, everyone
really notices.
In forecasts done last year, I
predicted the February
Minnesota-Wisconsin (M W)
price would be $11.20 per hun
dredweight (cwt). The actual
M-W was $11.79. That’s 59 cents
higher than forecast 1 could take
solace in the fact that the consen
sus forecast by 37 dairy market
forecasters from all parts of the
industry predicted the M-W would
be $ll.lO. Or, that if you blow a
forecast it is better to underesti
mate the price than to overesti
mate it. But when price forecasts
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Come along to the 42nd annual
KEMPTON COUNTRY FAIR
FRIDAY »
• Midnight Special - 7 and 9:30 p.m.
• Tommy Schafer and the Blue Mountain Ramblers -
8:15 and 10:15 p.m.
•Tractor Pulls, 6 p.m.
SATURDAY »
• Craig Thomas Moore - 3 p.m.
• Ronnie Smith - 6 and 9:15 p.m.
•Johnny Paycheck - 7:15 and 10:15 p.m
• Children’s Day 1 to 4 p.m.
• Mountain Madness Off-Road Races, Figure 8-12 Noon;
Drags - 6 p.m.
SUNDAY »
• Country Keys featuring Linette Mertz, former Miss
Pennsylvania - 4 p.m.
• Billy Walker - 6:15 and 8:15 p.m
• WEEU Bicycle Race - 9 a.m.
• Miss Kempton Fair Scholarship Pageant -12 noon
• Mountain Madness Off-Road Races -12 noon
• Children’s Pedal Tractor Pull -1 p.m.
IVERY DAY »
• Petting Zoo - Quilt Show and Sale - The Midway - Rides
- Great Food - Bingo - Covered Stage and Seating 100
Exhibitors - Free Entertainment, rain or shine
IMISSION •
$4 per person Friday, Saturday. Klda, 6-12,1/2 Price,
Under 6 Free. Sunday $4 a carload. Free Parking
Kempton Community Center
Located in Kempton, 5 miles north of 1-78 on Rt. 737 or Rt. 143.
From 309, south on Rt. 143.
Phone (610) 756-6030 During Fair (610) 756-6444
Dairy Economist Explains Missed Prediction
are off by this much, the profes
sional curiosity comes out. Why?
What caused this market
condition?
Dairy surpluses are gone.
Market conditions are such that
the milk surpluses of the past are
gone— not only domestically, but
also internationally. Without surp
luses overhanging the market, the
rigorous demandconditions in the
markets will lift prices. This is
precisely what happened.
For the last few years the
USDA’s CCC has been purchas
ing only butter. The butterfat surp
luses have caused the CCC to
adjust the price support purchase
price for butter and nonfat drymilk
several times and have been driv
ing the movement toward compo
nent pricing.
As the price of butter started
going down, the continual slide in
butter consumption stopped and
started to reverse. As the market
JUNE 21 . 23
price for butter went up, the CCC
did not have companies selling
butter to the government As the
price of butter went even higher,
the CCC started selling its stocks
back to commercial markets.
USDA’s cupboards are bare. At
the end of February, 1995, the
CCC has uncommitted inventories
of butter of 24 million pounds.
This compared to 213 million in
February, 1994. If you took all the
CCC’s uncommitted inventories
of all products and converted them
to milk equivalent (milkfat basis),
the total USDA surplus would be
530 million pounds of farm milk.
Currently, U.S. dairy producers
ship about 420 million pounds of
milk a day. The current U.S. gov
ernment surplus is, therefore, only
about one-and-a-quarter days’
milk supply. Even when commer
cial inventories are added, the
reserve supply of milk in the U.S.
marketing system is really quite
small.
The U.S. was never a big factor
in world dairy markets. The
Oceania countries (New Zealand
and Australia) and the European
Union (EU) always supplied the
world. The EU countries estab
lished quotas. If they have sold all
of their products, there are no
extra supplies to hold world
prices. In the past government
subsidies produced a few extra
supplies in the former Communist
Friday to Sunday
11.2- 4 PLY $ll5
14.9- 4 PLY $136
14.9- 6 PLY $2OO
11.2- 4 PLY $143
12.4- 4 PLY $l5O
13.6- 4 PLY $166
13.6- 6 PLY $lB7
14.9- 4 PLY $194
14.9- 6 PLY $217
16.9- 6 PLY $264
16.9- 6 PLY $278
18.4- 6 PLY $317
18.4- 6 PLY $345
18.4- 8 PLY $377
13.6- 4 PLY $2ll
13.6- 6 PLY $234
15.5- 6 PLY $258
18.4- 6 PLY $379
18.4- 8 PLY $399
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Exide Batteries Low - Low Prices
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JOE’S BATTERY & TIRE
2225 UNION BLVD.
ALLENTOWN, PA 18103
countries. With changes to these
economies, those dairy products
supplies are gone. Weather condi
tions in Oceania cut milk produc
tion and available export supplies
in those countries. The Dairy
Export Incentive Program (DEIP)
in the U.S. further tightened the
available supplies of dairy pro
ducts for export.
Tight world supplies mean that
the U.S. can be a force in the
world commercial export markets.
The world price of butter has risen
to the U.S. butter price. The
United States will export unsubsi-
SAT. JUNE 15 - B:3OAM 3
parcels of real estate, 2
story home, Strausstown
Post office & 24 acres
woodland, antiques,
household, personal prop
erty. In Strasstown, Berks
Co., Pa. Prom Strausstown
Exit 71 78 Take 183 South
to blinking light, turn rt to
sale one left, next to post
office. For Carrie Ketner
Estate. Les longenecker,
auct
SAT. JUNE 15 - 9:ISAM
Repossession Sale, Key
stone Public Auto
Exchange.
SAT. JUNE 15-9 AM Print
ing, warehouse & office
related items. 1501 N. 7th
St., Harrisburg, Pa. For
Hargro Flexible Packaging.
Ziegler Auction Co.
SAT. JUNE 15 - 5 auctions
In one day, bankrputcy auc
tion Chapter 11 reorganiza
tion Transmix Sand &
Gravel Inc., liquidation of
Hildeman Paving & Exca
vating. Transmix Cement
Co. & major Job completion
for lombardo Construction
& Line Co., Inc. 30 miles W.
of Newark, 1-78 exit 11, Just
off interstate. Alex Lyon 7
Son, aucts.
SAT. JUNE 15-10 AM JP.
McCaskey High School
Furnishings, just off Rt 30
at Rt 23 (Walnut St.) exit.
For School District of Lane.
Kerry Pae, aucts.
SAT. JUNE 15 -10 AM
Absolute Municipal Surplus
Auction. Basemen tof old
Northampton Borough Gar
age, Laubach Ave. & Smith
Lane, Northampton, Pa. off
Rt 22 at 897 N. North to Rt.
329 (Nor-Bath Blvd), left
onto Rt. 329 to Northamp
ton, left onto Laubach Ave.
For Boroughs of Emmaus,
Northampton, Slatington;
Townships of Bethlehem,
Lehigh, Lower Sauoon, E.
Allen, Salisbury, Whitehall,
South Whitehall; and
Lehlgh/Northampton Air
port Authority. Peter Krall
Auction Co.
Ffll. JUNE 21 - 7PM Con
signment Sale of Feeder
Pigs & Feeder Cattle. Held
at Middleburg Auction
dized dairy products this year.
These commercial exports will not
be large, but they do serve notice
to the U.S. dairy producers, dairy
marketers, policy makers, and the
world dairy trade that the U.S.
dairy industry is going to be a
world dairy marketer in the future.
Only five years ago the U.S.
butter price was twice the world
price. Now U.S. product is being
commercially exported. Who
would have thought it? Certainly
not the dairy economist who
missed the M-W forecast by 59
cents.
Public Auction Register
Closing Date Monday 5:00 P.M.
of each week’s publication
JUNE
HISTORICAL 47+
ACRE FARM
COLONIAL STONE HOUSE
8 FIREPLACES * 13/15 ROOMS
POND * BARN * LITTLE ELK
RIVER
ESTATE AUCTION
CHILDS, CECIL COUNTY, MARYLAND
SAT., AUG. 3RD AT 11 AM
POTENTIALS UNLIMITED
CALL FOR BROCHURE:
R.C. BURKHEiMER & ASSOCIATES
REALTORS & AUCTIONEERS
1-800-233-4169
Sales, Inc., Rt. 522,3 miles
E. of Middleburg, Pa, 5
miles W. of Selinsgrove,
Pa. Clarence Shirk, Bryan
Imes, aucts.
WED. JUNE 19 -6PM B&O
China, toys, painted shade
table lamp, mahogany fur
niture, leaded glass win
dows, oriental rugs, cylin
der desk, oil paintings, ster
ling silver, gold coins,
marble top washstand, oak
bow front chian cabinet,
pine step back cupboard,
round oak tables, waterford
& other crystal, dining room
suites, mirrors, pictures,
, Victorian turn. From the
estate of Rebecca Tansil,
Raymond L. Lang, and
other consignors held at
Exhibition Hall Foyer,
Maryland State Fair
grounds, York Rd, Timo
nium, Md. Steve Dance,
aucts.
THURS. JUNE 20 - 9AM
Consignment Machinery
Sale. Middleburg Livestock
Auct R 3 PO Box 185, Mid
dleburg, Pa. Info. Clarence
SHirk 717-656-8793 or Lar
ry Benfer 717-837-5638.
FRI. JUNE 21 -10 AM
South Central Pa Contrac
tors Auction. From Rt 15,
take Hunterstown Exit (rt.
394 - E) sale is approx. 'A
mile on right Backhoes,
crawler, loaders, Industrial
tractors & skidloaders,
graders, forklifts & genera
tors, rollers & manlift, farm
tractors & equip., lawn &
garden, road tractors, cab
& chassis, dump, pickups,
utility & specialty trucks,
box trucks, flatbed, vehi
cles, trailers & sea contain
ers, mlsc. Wolfe Aucts.
FRI. JUNE 21 - TPM Kish
Valley Dairy Sales 11th
Annual Anniversary Sale
located on the comer of S.
Walnut St. and Front Moun
tain Rd., Belleville, Pa.
Sherman Glick, owner/
manager. Bryan D. lines,
auct
SAT. JUNE 22-9 AM Birds,
animals, housewares. New
Danville Fire Co. Social
Room, 2094 New Danville
Pike, Lane., Pa. along Rt.
324 near Rt. 741. For Ben
jamin A. Keller T/A Keller
Exotics. Keller, aucts.