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jrsiajdranch
Veteran Advisor

From the parlor pit 11-11

Lets take a look at what future dairy legislation might look like now with the wave of change that has swept the country.

 

I am not making this partisan and I am not trying to start a party war here I just think that maybe there is little real world reflection going on in this new era of Gov. or maybe it is a new era of the same old same old.

But I really don't think it will be the same old same old as Dan looker points out in http://http://www.agriculture.com/news/policy/next-farm-bill-likely-to-shrink-in-new_4-ar11940

With more than half of the 28 Democrats on the House Agriculture Committee defeated in Tuesday’s election, the new Republican dominated panel is likely to have a lot of fresh faces.

 

On the dairy side some powerful members are gone from both houses

 

House bill 5288 was sponsered by Jim Costa who lost his bid for reelection.

Here is a short summary of the bill

http://www.stabledairies.com/DPSASummary.pdf

 

Arlan specter also was one who would push forward on dairy industy concerns, he is also looking for new work.

 

While there are many new faces there is also new oposition to the Status quo.  Yesterday the blue ribbon panel on the budget came out and said that while we needed to raise taxes we also needed to lower spending and one of the areas of contraction would need to be in the ag budget.

I'll just bet that we won't see the food assistance side cut.

 

We have also taken the level of infighting in the the ag sector to new levels as the turkey federation and the pork producers joined in a lawsuit to see the EPA repeal the thier latest acceptance of E-15.

( I am not really sure why NMPF didn't join there is mush clamoring by it's members against this new ruling as well)

Here is a quote from the press release:

The Coalition continued: “After decades of federal subsidies and fuel mandates, the corn-based ethanol industry should stand on its own two feet and stop depending on the United States taxpayer for unneeded and unwarranted support. Enough is enough.”  

National Turkey Federation President Joel Brandenberger said: “Feed accounts for 70 percent of the total cost of raising a turkey, and corn is the single-largest ingredient in turkey feed.  The spike in corn prices caused by the expansion of corn-based ethanol could be crippling at a time when the turkey industry is just starting to recover.  This dramatic increase in feed prices has led most turkey processors to cut production.  Increasing the ethanol blend to 15 percent would destroy any chance our industry has of recovery in the near future.


 

So what does it all mean?  To paraphrase Bill Clinton "the era of big Gov Ag is over"

 

I for one hope it really is. 

 

The future may very well rest in our own hands as dairy producers more than it ever has before.  The time to run to the gov. for help in price stability is over I think we may be on the verge of a very bright economic dawning.

New dairy legislation(or any commodity funding for that matter) will require that first and foremost it be revenue neutralThat means self funded

How much more are you willing to give out of your milk check to push dairy price stabilization?

Second it must enjoy multi farm orginization support.

This new congress is going to look for things that all farm orginizations will support no more favoritism. Dairy, corn, and sugar have enjoyed most favored commodity status for to long.  Many other groups are looking for their peice of the pie and they have a much louder voice with outside opponents than ever before. ( Costas seat was one by a republican who grows cherries)

Third what will this legislation have as an effect on food subsidy programs?

With over 40 million of our nation on food assistance any program which raises the price of food will have a huge impact on the budget as far as these federal programs are concerened.  Why would a commitee vote to increse with one vote two sides of the budget?

So ask yourself how will your commodity fit into these new realities?  Or maybe all of these things will have no real impact and we will continue on with the same old same old.  I'll bet Dan looker would think otherwise!

 

Yesterday the dairy markets languished once again. with blocks closing at 1.40

 

September saw big export numbers in cheese but we also had a big import number on MPC's Some how we need to stop shooting ourselves in the foot with these yiekld enhancing MPC's.Year to Year we have imported +8.3%.

Feel free to disagree after all it's AMERICA and you have a right be wrong! Smiley Very Happy

BE safe JR

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8 Replies
kraft-t
Senior Advisor

Re: From the parlor pit 11-11

Don't forget, JR that the fed has provided almost free money to finance your operation. Not only that but our dependence on foreign oil requires that we encourage alternative fuel sources.  Cut back on feed. Put your cows on a diet. They eat less and produce less and you get more for your milk.

 

If you don't agree with that I will cut back on ice cream. I gotta save money somewhere if your trying to cut my income.

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redrotor
Veteran Contributor

Re: From the parlor pit 11-11

JR , I thought you were very optimistic a month or 2 ago. Dairy price erosion is common this time of year. What''s changed?

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jrsiajdranch
Veteran Advisor

Re: From the parlor pit 11-11

Red I am optimistic that the free mkt. will come around and will take us to a level of profit.  I am pessimistic that most who are in the know will actually realize the opportunities that abound right now. 

And yes historically we always fall off in price in the fall but that trend has been somewhat muted in the past few years.

My optimism is always tempered with the realism of the fact that anything can change. 2 months ago Mexico hadn't raised the tarrif making our cheeses completly unaffordable to that mkt. 2 months ago Bernake hadn't fired up the printing presses. and 2 months ago corn was about  2.50 cheaper.  So the realism is that times are tough my optimism is that the tough will keep going. 

 


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jrsiajdranch
Veteran Advisor

Re: From the parlor pit 11-11

Kraft you sound like those whiners in England because they are going to have their tution subsidies cut.  I am saying from this post gov. can't keep supporting us.  That is all.   It doesn't matter what your justification is for your peice of the pie.  The pie is gone and we have eaten the neighbors and now we are going down the street for more, and there isn't anymore!  So why not get ahead of the curve and tell them where we would like our cuts to come from instead of having some one else cut them for us?

 

This is not a matter of if anymore this is a matter of how much and how deep will these cuts take in?  Dairy has lost it's chance for dramatic gov. intervention as has pork or poultry or beef.  Grain commodities have little hope of keeping what they got so why not get ahead of them and say what we want to keep and don't die for the frills?

 

Lets just say hows about keep the blenders credit but give up the direct pmt.?  Is that  proferable to losing the blenders credit and a cut in crop insurance subsidies?

 

Dairy has lost all of it's clout basically and now we are left with a beuracraucy that must be supported with the hope of a handout  why not be proactive on your side?

 

As to cutting my income it has already happened and while we are probably at the bottom of this price cycle we are not going to pull out very far or very fast from here so my point is We've already lost I hope you don't enjoy our pain again. ( besides braun dairy says your a good customer and they would feel your savings much sooner than I) JR

 


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time:thetippingpoint
Frequent Contributor

Re: From the parlor pit 11-11

jr.....as long as Krafty can sell his corn to the Saudi Sheik's index fund, he has no need for you. Someday soon this will change and his cheese will double in price and he will wish he had taken a more informed look into the issue, just my opinion of course. Subsidized products always loose the subsidy at some point, probably after it has injured other demand. The meats and dairy were Katrina'd in 08, this is just the under-toe. Very high meat prices are on the way next summer, so hang on and enjoy the ride.

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kraft-t
Senior Advisor

Re: From the parlor pit 11-11

I would vote to keep the blenders credit and ****can the rest. If we can't afford to subsidize health insurance, then it is not necessary to subsidize federal crop insurance. Both are socialist effort and I vote for ordinary people instead of crop farmers.

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muddymiller
Frequent Contributor

Re: From the parlor pit 11-11

JR, grain prices are down hard tonite.By morning feed wil be cheap and Krafty will look like a genius.

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jrsiajdranch
Veteran Advisor

Re: From the parlor pit 11-11

Are you saying that Krafty looked less than intelligent at some point in the past?  

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