By  E. W. Lang

Block cheese ended the week at $1.92 per lb., down seven cents over five trading days, but still 43 cents over barrel cheese. There have now been 24 consecutive trading days where the block/barrel spread has been more than 20 cents. For reference, a four cent spread has been the historical norm, and the last significant time the spread has been over 20 cents was a consecutive 22 days.

This is another phenomenon that we can blame on Climate Change, for lack of any fact-based reasoning. There are a few other hypothesisae, but as is so often the case with competitive bidding and price discovery, no one knows why the spread has been so wide, so long. Next week, or in a few weeks, we might know why this has happened.

Class III Milk Futures for Calendar 2020 average $17.59, a decrease of 31 cents since last Friday. Class IV also averages $17.59 per cwt. for this year. That's a loss of 34 cents for the week. Butter, however, gained four cents to close at $1.90 per lb.

USDA announced some prices for January that are used in the DMC Monthly Government Milk Subsidies. The all milk price was $20.70 per cwt., and the milk-feed margin was estimated $11.95 per cwt. Few months in my life or yours has the margin been that high. Thus, no DMC subsidies for the American dairy farmer for now, as margins have to be under $9.50 for us to collect any money.

As a side note here, the price of fresh and close milk cows is perhaps 10 percent higher than a year ago when milk margins were almost 25 percent lower than they are now. The comparatively slight effect on dairy herd replacement costs ls largely a function of the persistently abundant supply of dairy heifers. This can be attributed to, or blamed on, sexed semen, other scientific advancements and better dairy herd management. Or it can be attributed to, or blamed on, Climate Change, since that can popularly attributed to, or blamed on, anything, even in the presence of logical, fact-based reasoning.

I'm told that the spirits among the milk producing fellowship are generally better than a year ago, but there is still a long way to go to recover the equity lost by dairy farms since the $20 to $23+ milk prices of 2014. .

Witnesseth: https://www.genskemulder.com/…/upl…/GG-Profits-in-2014-2.pdf

Mr. Genske's five year old summary and analysis of 2014 profitability resonates again today, and indicates a banner year like 2014 still wasn't enough to get many dairies back to zero from the $10 milk prices in 2009. Producers should read this twice when contemplating, "Should I stay or should I go?"

The stock market sold off today as concerns continue over the China Flu. Someone in Russia has it now, so it's hard to see how wide spread the situation is, since Communists control the press in both countries, more so than here.

Amazon gained 7.4% today, following their quarterly earnings report. Before this morning's open, it had been up 11% in after hours trading. A guy on TV said that 11% was a move of eight standard deviations in this particular case. You animal breeding junkies can probably conceptualize that. For the rest of us, it's just really, really a lot.

As long as I'm talking sideways to the geneticists out there, here's another loose parallel involving the interdependence of variable quantities. Earlier I mentioned the Climate Change and the Communists. I'm guessing the Fst is something north of 80% among the leadership ideology of both. And I'm guessing that the organizational and regulatory methods equally correlate.

Actually, this kind of thing happens on both ends of the political spectrum, among causes and campaigns for both good and evil, depending on one's perspective. Many churches and social orders organize, operate and regulate behavior in similar fashion, and have done so for millennia.