Al6-Lancaater Farming, Saturday, December 4, 1999
GRAIN, CATTLE, HOG,
& MILK BFP
FUTURES MARKETS
Markets Courtesy Of Chicago Board and Mercantile Exchange
(Closing bids: Wednesday, December 1, 1999
Corn
Daily Prices As of
Symbol:C
12/02/99 DEC
12/02/99 MAR
12/02/99 MAY
12/02/99 JUL
12/02/99 SEP
12/02/99 NOV
12/02/99 DEC
12/02/99 JAN
12/02/99 MAR
12/02/99 JUL
12/02/99 DEC
Total
12/01/99
Soybeans
Daily Prices As of
Symbol S
12/02/99 JAN 00
12/02/99 MAR 00
12/02/99 MAY 00
12/02/99 JUL 00
12/02/99 AUG 00
12/02/99 SEP 00
12/02/99 NOV 00
12/02/99 NOV 01
Total
12/01/99
Forecast Of Pennsylvania Milk Prices Under
By Ken Bailey
Associate Professor
Penn State University
Novembei 30, 1999
The National Milk Pioduceis
Fedeiation announced November
19 that a yeai-end omnibus
spending bill has been appioved
by the House and Senate
Piesident Clinton icportedly
signed the budget bill Monday It
contains dairy provisions that will
amend the tedeial order reform
process More specilically it will
• Require the USDA to use
Option 1A Class I price
differentials rather than Option
IB contained in the Secretary’s
final rule,
• Require USDA to hold
hearings to determine the proper
level of make allowances tor
cheese (Class III) and
butter/powder (Class IV)
processors The make allowance
affects Class 111 and IV prices and
hence the minimum prices that
processors pay for milk,
• Establish a pilot program to
allow farmers to forward price
their milk in Classes 11, 111 and
IV,
• Extend the Northeast
Interstate Dairy Compact through
September 20, 2001 Note that the
bill does not allow for other stales
to join the existing compact
My contacts indicate that these
changes will be added onto the
final rule iccently approved by
dany taimcis and could be
implemented as early as January
Thursday, 2 December
Volume Open_lnt
72217 402454
Thursday, 2 December
High
4780
4850
4920
4964
4964
4960
5012
5280
Open
4764
4832
4900
4964
4934
4960
5010
5280
Volume Open_lnt
41400 162232
Federal Order Reform
1, 2000 The budget bill
icportedly contains language that
will allow USDA to quickly
implement these changes (i e no
need toi a hearing process,
iderendum, regulatory impact
statement, etc )
1 made two forecasts tor milk
puces in the Northeast one
thiough 1999 using my BFP
model, and the other tor 2000
using my new federal older
reform model Both models can
be downloaded from my website
http //www aeis psu edu/danyoutl
ook/excel htm These models use
commodity forecasts in Table 1
below
The year 2000 forecast
assumes Boston will be the basing
point for the new Northeast order
The Boston Class I differential
will be $3.25 per cwt under
modified Class IA It is currently
$3 24, The Northeast blend price
m Table 2 below is computed
using the following utilization
rates Class I = 41%, Class II = 19
%, Class 111 = 33%, and Class IV
= 7%. The Northeast blend price
is then adjusted to Lancaster, PA
by subtracting $0.45 per cwt This
adjustment reflects the difference
in county Class I differentials
under order reform as modified
by the omnibus budget (Option
1A)
The model results in Table 2
suggest milk prices will decline
sharply from record high levels in
the fourth quartei of 1999 and the
first quartei of 2000
(Turn to Page A 26)
Chge
-32
-30
-34
-26
-32
-30
-40
-10
Last
4726
4802
4864
4924
4932
4910
4972
5260
Low
4720
4794
4860
4914
4920
4910
4966
5260
Lean Hogs
Daily Prices As of
Date
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
Dec 99
Feb 00
Apr 00
Jun 00
Jul 00
Aug 00
Oct 00
Dec 00
Feb 01
Composite Volume
12/01/99 11608
Live Cattle
Daily Prices As ofThuisday, 2 December
Date
Dec 99
Feb 00
Apr 00
Jun 00
Aug 00
Oct 00
Dec 00
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
12/02/99
Composite Volume Open_lnt
12/01/99 20794 131322
Oats
Daily Prices As of
Symbol:o
12/02/99 DEC 99
12/02/99 MAR 00
12/02/99 MAY 00
12/02/99 JUL 00
12/02/99 SEP 00
12/02/99 DEC 00
Total
12/01/99
Forecast of Lancaster Blend Price Under Order Reform
Figure 1
18.00
17.00
16.00
15.00
14.00
13.00
12.00
11.00
10.00
cf o° v
larison of Milk Prices: Current vs. Order Reform, $/cwt
Table 2. Com]
Order Reform
Class I Price Mover Class II Price Class 111 Price Class Illa/IV Price Boston Lancaster
Final
Month Current Final Rule Current Final Rule Current Final Rule Current Rule Blend Blend_
- Thursday, 2 December
Open High
Low
5190 5245
5580 5680
5610 5690
6290 6295
6140 6140
5905 5915
5505 5505
5335 5335
5330 5370
Open_lnt
57221
Low
Open High
6957
6952
7080
6897
6905
7100
7200
6900
6885
7025
6865
6870
7060
7172
6930
6890
7030
6890
6897
7075
7190
- Thursday, 2 December
Open
1012
1116
1164
1154
1196
1262
Volume Open_lnt
1072 12173
14 31 16 27
13 72 10 27
13 47 11 62
12 05 11 81
12 21 1126
13 84 11 42
13 50 13 59
13 46 15 79
13 29 16 26
12 50 11 49
12 29 10 34
11 90 9 91
1196 1114
12 14 1112
12 09 10 97
11 88 10 87
12 27 10 69
1303 11 61
13 03 12 39
13 03 13 55
13 03 13 77
13 03 13 94
13 30 13 66
12 34 12 61
Last
Chge
Volume
4447
4868
1341
490
197
131
67
67
+7
+3O
Chge
Last
Volume
8860
8331
2210
799
335
167
92
-30
6927
6917
7055
6882
6882
7060
7177
-13
-18
-15
-8
High
1020
1124
1172
1156
1204
1262
Low
1010
1112
1164
1154
1196
1262
Prev.
Open_lnt
16624
24699
8305
4759
1626
805
293
107
Prev.
Prev.
Open_lnt
28540
52757
28167
11366
5149
2814
2529
Prev.
Chge
Last
1020
1122
1172
-1156
1204
1262
+ 4
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+ 6
+ 2
1999
2000