By E. W.
Lang
Butter lost seven cents on the CME this week to close at $1.91 per lb. Cheese
fared better at a loss of one and two cents since Wednesday, last, to close out
this week on blocks at $1.97 and barrels at $2.23 per lb.
According to USDA Dairy Market News, cheesemakers
had some opportunity to buy $5 milk during the Thanksgiving holiday, but labour
pressures prompted processors to close, rather than take delivery of cheap milk
on the spot market. I saw no reports of dumped milk, fortunately.
November Class III Milk was announced at $20.45 per cwt., so that was $6
over a year ago. December is currently trading at $19.55 per cwt., up $5.77
from December, last.
Dairy cattle prices continue to slowly increase. At the Turlock Video
Sale today, Jersey Fresh Cows averaged $1650 on all loads. Top Fresh Jersey
load was $1750 and Top Jersey Springers were $1475. A load of fresh Holsteins
from Iowa topped that breed at $1725.
Communist China has said they will waive tariffs
on U.S. soybeans and pig meat. In response, Pork 'n Beans gained one and
three-eights on the Amazon exchange, closing Friday at 72 and five-eights per
can.
Soybean meal concurrently responded with a loss of $2.50 per
ton on the CME. Note, we have been selling beans to buyers in Brazil, and
they've been marking them up and shipping them to the Reds. So there has been a
round-about way-around for some months. These are tricky folk that we're
dealing with, both down there and over there.
It looks like hogs continued their downward
trend, even after the PRC declaration. I don't know a lot about the swine
industry, other than ours is resembling theirs faster than many of us thought
it would.
The country hog auction bottomed out just under
$9 in December, 1998, and feeder pigs were free with no takers. The country hog
producer then pretty much adopted industrial production with a mechanism to
manage price risk...or got out of hogs entirely. Many refinanced their pork
losses against land, took a job in town and were a decade getting back to even.
In the end, many were able to keep their land and now enjoy some wealth as age
sets in.
The same thing happened to chicken farmers thirty
years earlier. Every empty chicken house, every sow that left the area and
every litter that wasn't finished eroded the culture and economy of the nearby
town where farmers bought 50 lb. bags of feed, gallon jugs of colored pig
medicine, fencers, hog panels, panel gates and egg crates. So now is the case
in milk production.
This kind of restructuring isn't unique to
farming. Ag just invokes an emotional component that others sectors seldom
enjoy. As Farmer Americans, we are among the last protected class in the United
States today. We often allow ourselves to be seen as victims, even though we claim
otherwise. The public bestows upon us honour and privilege (subsidies), along
with sympathy seldom afforded our fellow countrymen and women.
Today's American Factory Worker is likely without
a union, and more often without a job as work moves off shore, or is just done
by a robot. The American Teacher is being supplanted by schooling on the
internets, just as colleges close due to fiscal loss. American Oil Workers are
looking for new jobs, even as I clean up this post.
So is the hazard of commodity production: Milk,
pork, eggs, industrial products, knowledge/skill and petroleum are all
commodities. The low cost provider of any commodity is among the last standing.
Milk producers have an opportunity this winter to
do some thinking, planning and choosing. Milk price is pretty good right now,
and people are wanting to buy cows. Dairy farmers have a financial reprieve for
a few months, and probably just for a few months. As such, milk producers have
some time to choose the wisest and best course for action going forward.