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Veteran Advisor

From the parlor pit 12-7

Corn and beans need to be higher!  Why do I say this becasue we haven't been able to get our production cut. I know I am always whining about the price of corn and beans but it just doesn't seem to drive down production.  As I am able to grow about 80% of my own feed stuffs and increase will hurt me less than most farms.


Here is some numbers on production.

Rising milk production poured into manufacturing channels in October. Total cheese
production declined seasonally but remained well-above year-earlier levels. Output for
October was 892.6 million lbs., up 3.5% from last year, according to USDA’s “Dairy
Products” report released this afternoon (see chart) . Cheddar production was up 4.1%,
mozzarella was up 4.9% and production of other varieties was up 1.7%. Cheese
production in USDA’s Western region was up 6.2%, led by an increase of nearly 20% in
New Mexico.
Butter production in October was 121.6 million lbs., up 7.5%. NDM/SMP production was
132.8 million lbs., up 29.0%. Yogurt production was 351.2 million lbs., up 13.5%, USDA says


This is from last weeks CME daily update.


Yesterdays action on the CME was very disheartening. Barrels fell again while blocks held steady.  What that means is that class 3 futures dropped in all months dropping to new contract lows in Feb. and March while over all, the average drop thru April was 22 cents.


I also read an article that stated in 2009 the average cost of feeding a cow in California was  $2274 per cow.  Midwest costs were less at $2089 per cow. 


The average California farm lost 682 dollars cow. while in the Midwest the average farm lost 532 per cow.


This year thru June 30 the average Californina dairy has made 65 per cow.  Hard to rebuild equity at that pace. 


For today I think we see some price improvement just because of the turn around tuesday thing Butter seems to have found it's bottom but we will see.  Alot depends on if we can get into those Mexican markets again or if we can break into the Russian market.  Also there seems to be consumer data out there stating that spending has increased on foods due to the holiday season but that they are anticipating much less spending on dairy products after the first of the year.  I don't understand that data cause I believe people still have to eat, but that is what IDFA is concerned about.


It's cold out this morning the Bobcat really didn't want to go this morning but with a little coaxing she got in gear.  Be Safe. JR

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4 Replies

Re: From the parlor pit 12-7

Hi Jr: I guess that means you made $150 per cow thru june. The article must not have told you your checking account is full and all your bills are now caught up. You are probably too busy planning your vaction to have noticed. It is a heck of a business you're in, when you come to realize that the only way for you to prosper is for someone else to lose their shirt. I learned in the early 90s and got out. I couldn't take it any longer and decided for the sake of my family it was the best thing for me.


I hope the Holidays are good to you, Chistmas morning was always a little extra stressfull with the cold if something went wrong. It doesn't sound like there will checks for $20 milk for xmas

Good luck Jerry

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Veteran Advisor

Re: From the parlor pit 12-7

Actually I really enjoy Christams morning.  Usually my boys get up with me extra early and we can get done with chores fairly quickly.  Just as soon as we are done we run into the house and open presents and then scurry to whoevers house we need to be at for the family christmas. Back outside by 2:30 to do that evenings chores. Excellent excuse to get away from the loud toys with the wild lights!  Also work off all the good treats to eat. Last thanksgiving the mixer wagon broke and I had to stay home and fix that instead of going to the families eating feast.  I heard about that for most of the next year.  


Jerry I am to stubborn to quit.  I don't know if that is agood thing thou. JR


PS that was 150 pre tax! LOL

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Nebraska Sandhiller
Frequent Contributor

Re: From the parlor pit 12-7

Suprised to hear you say that. 


But remember, cheap corn makes cheap cattle, and cheaper hogs, chickens, and turkeys.  Cheap corn is not good, however neither is real high corn.  I expect cheap corn also makes cheap milk.  And for all the ethenol bashers,  I woud expect cheap corn should make cheap ethenol which makes cheap distilers grains, the circle continues.


Some local farmers said a few years ago, that they had a hard time making ends meet with 2 dollar corn, but wasn't sure they could survive 4 dollar corn and I don't beleive they were far off with all the increas in expenses.

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Veteran Advisor

Re: From the parlor pit 12-7

Nebraska don't be surprised!  No one that I know of in the midwest is against high priced cornand beans.  We are a little tired of the rallys being one sided but that is another story.  The other side of it is that as corn and beans stay up here our advantage over most of the rest of the country on production costs becomes more reall and advantagous.  What might be the hardest part in all that is then the production moves away from population bases that would support our class 1 price better.  The scarry thing is that when Cali. folds it will be very fast and the carnage will be truly ugly.  You can't build the dairy industry on a real estate bubble.

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