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On Cows and Markets

By E.  W.  Lang

Class III Milk for November remained over $20 for the week, ending Friday's trade at $20.19 per cwt. December gained 23 cents just today, and $1.13 for the week, ending Friday at $19.70. Calendar 2020 Class III Futures average $17.31 on the CME. Class IV Milk, meanwhile, averages $16.80 for the rest of this year and $17.61 for all of next.

Block cheddar, barrel cheddar and butter are all over $2.00 per lb. Cheese over $2 per lb. discourages commercial buyers from acquiring more than short term needs. They hope, and probably think, that cheese will go back down.

Part of the reason for the recent increase in cheese price is a sale to Mexico. A processor down there came up 5 million lbs. short, then came to our United States to fulfill his or her immediate need. That one international sale largely precipitated the highest price for cheddar that we have seen since 2014. And a sale like that is, unfortunately, an isolated incident. I've oversimplified what apparently happened, but let's hope for more big cheese sales to foreign buyers.

Milk-Feed Indices remain historically high, and there is no promise of further monthly government DMC milk subsidies for the rest of this year or next. However, there is some indication that Rounds 2 and 3 MFP-Dairy subsidies for the tariff and trade thing will be delivered to producers in November and January, just in time for the House and Senate primary campaigns.

Forty percent of this year's farm net income will be from government (i.e. taxpayer) subsidies or subsidized revenue insurance products. As Farmer Americans, we all want our freedom and independence from government, but we really want our government subsidies.

Today's Turlock Video Dairy Sale saw top selling fresh Jerseys at $1775 for Dalhart parallel cows averaging 59 lbs. The top selling fresh Holsteins, at $1575 per head, were from here in Iowa. Springer Jerseys topped at $1600 and Springing Holsteins topped at $1525, all by the pot or trailer load.

It looks like prices were steady to off one nod on Holsteins and up $100+ on Jerseys from October's auction. I watched today's sale for a while, starting 15 minutes in, and thought the bidding was less brisk than usual with the auctioneer talking a lot before his initial ask. I was however, pleased to see him appropriately dressed for the box, with a long sleeve, collared shirt, neck tie and hat suitable for church on Sunday.

If Jersey milk cows are outselling Holsteins both by the head and by the pound, may I offer a Modest Proposal where the Holstein breed would establish a Swift genetic migration program by incorporating purebred Jersey sires, with less size and more solids, in to the Holstein Herd Book. They could call them HX or H1, HJX or, you know, something like that, but with brackets {!} (?) [.]

Farm bankruptcies for the 12 months ending in September were up 24% from a year earlier, and the highest number of Chapter 12 filings since 2011, a year with $6 corn. Wisconsin had 48 of the 580 total filings, owing largely to low milk price, obviously.

Bankruptcy filings are reported as well under the number of filings during the 1980s farm debt crisis that most of my vintage well remember. I suspect, however, that 580 number, adjusted for the declining number of farm entities over 35 years, would have been something more like 3000 filings in 1985. I don't know how many bankruptcies there were, but there may not have been a lot more than 3000.

It was discouraging to hear that AMPI will be closing plants in Rochester, MN and Arlington, IA, owing to declining milk production in the region. Cooperative milk will be routed to other plants, including one in Blair, WI. All producer hauling costs and Producer Price Differentials in the Central Milk Marketing Order are threatened with this action, or so it would seem.   Again, to every thing there is a season. 

I'm happy to announce that "On Cows and Markets" and are negotiating with a major dairy internets publisher to sponsor some forthcoming dairy show coverage.

Next week's OCaM will be an epistle from Louisville, Lewavull, if you prefer, where the North American International Livestock Expo is held.