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On Cows and Markets

By E. W. Lang

Barrel cheese price on the CME has reached its highest level since November, 2014, closing out the week at $2.02 per lb. Blocks closed at $2.10, whilst butter lost nine cents this week and closed at $2.10 per lb., after gaining four cents today.

Class III Milk Futures currently average $18.41 per cwt. for the rest of this year and $17.10 for all of next, all following a general upward trend for the week.

Corn and Soy values increased some this week, precipitating a modest loss in the Milk-Feed Index for the rest of this year.  The MF Index is currently running ten and four bits, and a short $9.00 for all of next year.

Reports late Friday state that pork and soybean producers stand to benefit from a "Phase 1" trade package with the Mainland.

According to the New York Times, "If completed, the agreement would provide relief to American farmers and businesses that have been battered by the trade war. Mr. Trump said the “substantial” agreement would involve China buying $40 billion to $50 billion worth of American agricultural products annually, along with guidelines on how it manages its currency, the renminbi.

"It would also strengthen Chinese protections for American intellectual property and give financial services companies more access to China’s market, the president said.

"In exchange, the United States will not move ahead next week with plans to raise tariffs on $250 billion worth of Chinese goods to 30 percent. The president has not made a final decision on whether to impose an additional round of tariffs on Dec. 15, as he has threatened.

PRC Pork has been in short supply due to their pigs getting African Swine Fever, then being euthanized.  Bear in mind that this is a general agreement with nothing signed on paper. It may be that markets will adopt a wait and see attitude, given minimal or no actual trade developments following previous deals.

A couple months of higher milk margins has led to almost no increase in bred heifer and fresh cow value. Last week's video sale from Turlock, Calif., saw tops among fresh Holsteins and Jerseys from $1500 to $1600 per head, off $50 from last month's Holstein top of $1650. Sales were by trailer and pot groups.

Gold Standard market reporting by Dairy Herd Management corroborates stagnant replacement price information, adding that the monthly dairy sale in Sulphur Springs, Tex., has stuck the gavel for the last time.…/springer-prices-stagnant-dairy-…

To every thing there is a season.  Colfax, Iowa, had their last dairy sale in 1974 after the "beef shortage" when area farmers introduced Angus bulls to their Holstein cows. Oskaloosa, Iowa, quit having dairy sales in the late 80s, after the farm recession prompted many producers to sell out and take work in town. Waverly, Iowa, had a 1500 head dairy sale in 1967 when all milk producers had to go to bulk tanks from milk cans. Thirty years later, the last Waverly Dairy Sale was after local corn went over $5 for a few months, and dairy pastures and cow lots were plowed up for row crops.

The invisible hand, highest and best use of capital, waves of creative destruction... google any phrase for sobering insight on why there are fewer milk producers and ancillary services needed with each passing decade. Also, you can find out why any person in the United States can still go to any area at any time, and still be able to buy milk, cheese and butter at quality, in quantity and at a stable price.

I'll be on announcements at the Pioneer Dairy Classic in Lancaster, Wisconsin, on Saturdy.  There are a couple DAT ads coming up this week that will give additional Sale and Showmanship Clinic information. 

I appreciate the many of you who offered wishes and regards of one kind or another at the recent World Dairy Exposition. I'm penciling notes for a recap "Letter from Madison," that I hope to be insightful, reflective, resonant and amusing, though it may end up being just caustic and abrasive.   Dairy Agenda Today readers are encouraged to suggest "Letter from Madison" topics in the Comments Section below.


E. W. Lang identifies as a farmer near Brooklyn, Iowa  

Reader Comments
Comments posted do not express the viewpoint of Dairy Agenda Today or its staff members.

Old Timer
October, 14 2019
Is there any discussion or concern about the takeover of Holstein and Jersey genetics by a small handful of players?