By  E. W. Lang

There is some good news to share in the midst of market breakdowns throughout all of agriculture and other commodity markets this week.

Dairy slaughter cows were $10 per cwt. over last week's offering at Premier Livestock Auction in Withee, Wisconsin. Top selling fresh cows sold from $1600 to $2100. That $2100 sale topper was a Blue Roan milking 97 lbs., rather an embarrassment to the major dairy breed associations, though actually just an aberration. Price discovery can discover strange things.

Also, recent farm land auction prices are running from off 15% to steady with six months ago, this a benefit to those refinancing their livestock and grain losses against real estate. There is no way that sub $3 local corn equals $9,000 to $12,000 farm land going forward, but that's the current price on 85+ CSR2 all-tillable land here in Iowa.

Block Cheese was down five cents to close at $1.01 per lb., and barrels were steady at $1.00. Butter was down six at $1.18 per cwt. for the week. Class III Milk Futures for the next twelve months run from $11.05 per cwt. to $15.64. Class IV Futures run from $10.69 to $14.59 for the next year.

Spot milk is running $6 to $8 under class, and most cooperatives and handlers buying milk are implementing restrictions that involve any overage be paid for at value, after dumping or discounting. I understand they're dumping milk in Canada, also.

The USDA will make direct payments of $5.1 billion to cattle producers, $2.9 billion for dairy and $1.6 billion for hogs, according to a statement from Senator John Hoeven, chairman of the Senate Agriculture Appropriations subcommittee. The $2.9 for dairy appears to be separate and apart from the ongoing monthly Dairy Margin Coverage program. It may also be in addition to $100 million in announced dairy product purchases, but probably not.

A subsidy of $2.9 billion over the 17.9 billion lbs. of milk produced in February would amount to a one time payment of $16.20 per cwt. of current production, if I done the math right. I doubt that is how things will shake out, but there is an election in November, so through the federal government, all things are possible in an election year.

It looks like the dairy subsidy will be based on 85% of losses in milk value from January to April plus 30% of the expected loss for the subsequent six months. A cap of $125,000 per herd is in the offing, as well. I further expect the amount to be based on the same historical base production established for DMC, and whatever program we have before that, though it may be some multiple of that base for eligible volume, though that is just my own speculation.  

A modest sized herd that may have booked a lot of milk, but not feed, in November, signed up for DMC at the ASCS Office, got a forgivable Paycheck Protection Program loan application in on time, (the money is all gone now) and is in line to possibly collect $125,000 is going to fare pretty well this year.  A herd over 850 cows really only fares well if a lot of their milk was booked five months ago.   These new dairy bailout dollars will enable many producers some time to decide on a plan to stay or go. 

USDA Secretary Sonny Perdue also announced that the Dairy Market Coverage program will not allow additional participants.   I think it possible that could change as the election nears, all in the interest of Wisconsin, Michigan and Pennsylvania electoral votes. 

The Secretary has also mentioned that the United States Department of Agriculture does not exist for the purpose of preserving farm entities, though as producers we often think that is what they're there for. As a group, we farmers want our independence, our freedoms and our rights, and we also want programs that keep current producers in business so the next generation can carry on whether they are suited, skilled and sufficiently ambitious or not.

We have a lot of economic freedoms - more than civilization in history.   I can have a dairy and milk cows for a living, and so can anyone else in the United States.  I can start a construction company, set up a repair shop or sell life insurance, and part-time real estate. I can even try to become a professional athlete, even though I can't run, throw or catch a ball, learn or follow the rules of athletic competition, much less care who wins the game.

So in the United States, I have the freedom to choose my endeavor or profession, just as do all citizens. Yet we often feel that the federal government has some celestial obligation to financially support the farm enterprise and foster it on to another generation, but not do so for the rest of commerce. Yes it's food production, and Americans must eat, but transportation, processing, storage, forward contracts and options - technology, generally - almost guarantees that no one in the U.S. will be without food, ever.

Milk producers have long been viewed as the chosen people to much of America. Granted, milk producers have suffered as much loss in product value, more loss actually, as any commodity producer these last 90 days. But we should realize that we will become a little less chosen now, and here's why that will be the case.

At least twenty percent of the Unites States' work force will likely be unemployed for a time. Covid-19 stimulus costs will take 200 years to recover at current tax and amortization rates...and it doesn't stop there.

Many privately owned and operated businesses have closed for good - and those shuttered businesses are as important to their founders and owners as farms are to farmers. We farmers often forget that, or maybe didn't know it to begin with, or maybe we feel that since we feed the world, other enterprise is less honourable, or significant to society.

As such, farming and dairy farmers will less often enjoy the romantic embrace of a culture that is now consumed by unemployment, fear and discouragement.

Agriculture is petitioning for supplemental government assistance that, when rendered, will be insufficient and inadequate, just as it will be for most everyone else. In addition, the American farmers' nostalgic plight will be met with less sympathy from others as they become more concerned about their own jobs, their own plight and their own well being.