By E. W.
Lang
November Class III Milk ended the week up 23 cents from last Friday,
closing today at $20.25 per cwt. December lost 52 cents and ended the
day at $18.54 per cwt. Each of the subsequent 12 months gained four to 28
cents.
Barrels ended the week down 13 cents at $2.20 per lb., and block cheese was
down 12 cents to $1.89. Butter ended the week at $2.06 per lb., so that
was up 3 cents since Friday. Yay.
We're entering the Judeo-Christian butter and
cheese season, now that the pagan pumpkin season is over. Reports on the
pumpkin trade indicate that weights were down from the poor growing season,
thus affecting gross income among the producers, just like extreme heat reduces
milk production in dairy cows and rates of gain among the pigs and steers, and
gross income for their owners.
Butter sales are called "strong" going in to the
holidays. Bulk butter price is running 5 to 8 cents over market in the eastern
U.S., 1 to 3 over in the central region, and 1 cent under to 7 cents over
market out west, this according to USDA Dairy Market News.
Cheese markets are in "a correcting/descension"
status, according to Capt. Obvious at USDA DMN.
Dean Foods (DF) filed for reorganization under Chapter 11
bankruptcy this week. Dean debts are as follows: $172M to DFA, $8M each to
Saputo, LoL and Calif. Dairies. $6M each to Southeast Milk and Select Milk
Producers. But it doesn't stop there. Dean Foods has $700M in unfunded
pensions, which is particularly tragic, and $700M in bonds and debt to other
companies.
I don't know what is secured and what is
unsecured debt. The court granted DF access to financing that will pay for
stuff after the filing date of Nov. 12, so I suppose the above $1.608 billion
will have to be covered by accounts receivable, assets and cash on hand. Yes,
it's $1.6 billion. They bottle 40% of all the fluid milk in the United States.
Organic dairy product sales were up 6.9% in September
from September, last. Year to date organic sales have been down 2.6% from the
same nine months of last year.
Ag Sec. Perdue announced today that the round
two MFP-Dairy subsidies will start to arrive next week. They will amount to
five cents per cwt. of your established base. There is no need to sign up
again, assuming you got round one in August.
At the one-time leading dairy area of north
eastern Iowa, the Wednesday Dyersville Hay Auction Report reported
thusly: Premium Alf Lg Sq $280 - 295. Lg Rd Good Alf $170 - 212. Fair Squares
Alf $240 - 245. Fair Rd Alf $140 - $165. Grass Lg Sq Good $170 - 210. Good Rd
grass $150 - 170. Fair rd grass $135 - 145 per ton.
Good oat hay sold for a record price of $220 per
ton, probably bought by someone stocking up to condition next year's spring
show cows. I wonder who that might have been. Fair quality pat hay sold for
$135 per ton. New round 5 x 6 corn stalks sold for $50 per bale, and straw
large squares were $75 per bale.
Dyersville hay prices were called
"stronger," owing in part to early cold and snow in beef cow
country, following a miserable forage growing season and low yields, just like
the pumpkin folk we talked about earlier.
Top fresh cows at Premiere in Wisconsin ran from $1400 to $1700
on Wednesday. Most Holstein bull calves fetched $25 to $125 per head, half what
the beef calves brought. Single birth female claves were $10 to $65 on
Holsteins.
October was a big month here in Iowa for farm
land public auctions. Of the many auctions last month, only one parcel that
I know of didn't sell, so I am guessing the sellers feel that land value is
decreasing, (it is) and auction is a fast, decisive way to sell on a short time
frame. Perspective buyers have to either pull the chain or go home empty after
the auctioneer says, "Sold." The buyer also has to make a
non-refundable down payment on sale day, then abide by the time frame spelled
out in the terms of sale. The whole activity is sort of heartless, except for
the complimentary coffee and donuts and farmer fellowship before the sale.
As an aside, when I went to a land auction as a
child, the bidders in the auction venue smelled either like pigs or
cows. Now, no one smells.
The highest price that I saw here in Iowa was
$18,333 per acre for a 94.7 CSR2 in Sioux County, one of the leading livestock
counties in North America. That came in at $194 per tillable CSR2 if I used my
slide rule correctly. Normally we see $110 or so per tillable CSR2. Week one in
November saw a parcel at $14,400 for 80 A, 79 tillable, 80 CSR2, so that came
in at $178 per tillable CSR2.
November began with 200 tracts on the Iowa farm
land auction calendar, up 30 (17%) from last November's calendar. One year ago
a major realtor told me that cash grain farmers were calling, wanting to peel
off an 80 to get even at the bank. A couple months ago, another realtor said
farmers are calling to talk about selling a 160 acre parcel for the sale
reason, because an 80 won't amount to enough money.
The Dow Industrials, S & P 500 and NASDAQ all
closed at record levels today, so that was nice. Today's 4:00 A.M. headlines
said that the assurances of a forthcoming U.S/China trade agreement was close
at hand would have no effect on U.S. equity markets. Today's 4:00 P.M.
headlines said exactly the opposite happened. Seriously, once again, we
(anyone, actually) can twist anything that might or might not be accurate
information into a reason some market thing did or did not happen, or will
happen...or won't happen.