By E. W.
Lang
This week's markets were high drama, much like
the 1966 motion picture comedy, "The Russians and Coming, The Russians are
coming!" While the invasion of
Ukraine is in no way amusement to the people of Ukraine or to the state of
humane being, the markets saw violent movement one way at the open then the
other way by close, or during the following day.
Commodities were way up for a day, then back
down. Equities on the New York Stock
Exchange precipitously dropped for a day, or a few hours, then were back to
normal levels a day later.
So here is the takeaway. Commerce survives. On January 6, 2021, a group of employed, tax
paying, mostly professional U. S. citizens, led by someone disguised as the
opera character Brünnhilde, invaded the Capitol Building in Washington,
D.C. The markets moved little as a
result of that day, and so it was this week when the Russians were up to their
old tricks with new weapons.
It will be interesting to see if they fare better
on this campaign than they did in the 1980s when they spent a decade trying to
conquer Afghanistan and lost. History
repeated when we tried the same thing 15 years later. There's plenty of blame and foolishness on
all sides in the art of war.
April
Class III was the 75-cent limit up on Thursday and limit down on Friday. Nearby Class III Milk Futures were generally
down 12 cents for the week. March
through December Class IV lost, on average, 42 cents this week. Block cheese lost four cents this week,
barrels lost three. Butter lost ten
cents per lb., thus the 42-cent loss on Class IV.
Milk-Feed Indices remain in the $10 range, even
as national milk production and the dairy herd size continues to run below
levels of a year ago. This while 1800
dairies closed in 2021, following 3500 farms in 2020. Milk producers recently
received the highest pay prices seen since 2014 and are talking expansion when
and if their buyers are wanting more milk.
I'm hearing well managed industrial dairies are needing at least $20 and
usually a $21 pay price to break even.
While profitable prices are visiting today,
equity has been on vacation for much of the last six years. Certainly, there are some dairies that have
recapitalized against rising land prices, many that have survived with off-farm
income or benevolent support, and some that I suspect were black holes with
lenders or investors who basically couldn't do anything other than chain smoke
and hope for better milk prices.