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Veteran Advisor

From the parlor pit 9-28

A rare back to back parlor ppit here in the busy fall season.  We went into Mason City last night (ME and the wife) to buy some birthday gifts for our second odlest son. 

Like always when we go to MC mission creep takes over.  She said as long as we are going lets... buy groceries and go to the Rib Crib ( the briskit was very good) and eat out. 

Well combines were running all over the place.  18 at times was hard to see across from the bean dust.

When we got to MC it was a ghost town. Now I don't get to town much really don't care too.  When we go she goes to Aldi's to buy some food and then to Walmart. Most of the time she shops at Fareway in Algona.

So I did a little snooping in the dairy case. That was bad.

Aldis whole milk was $1.69,

Walmart brand was $3.58,

A&E was 3.44.

Meat for the 80% lean was 2.56 a pound at walmart.

Aldi's I am sorry was in the 1.69/pound range.  And I thought that was overpriced looked well less than edible!(Made me glad for the steer meat in the deep freeze)

Butter in quarters was 3.00 at Aldis and 3.49 at Walmart.

Whats all that got to do with dairy mkts.? 

Well I like to observe people when I go to these places.  I see lots of folks who are professionals very well dressed at both stores.  They are looking for value.  Several folks commented at walmart how the milk was to much and why couldn't it be lower?   The meat counter was definatly busier at Walmart as folks seemed to want to purchase quality over price.

It got me to thinking why do people buy milk on price and beef on quality? Both are perishable both are got to have items.  It just seemed odd to me.

Keep in mind those prices when you see what the board has done. The daily dairy newsletter does a good job of pointing out this years mkt . Read this from yesterday.

Q4 butter futures approach $2.00 average
Spot butter was bid another half-cent higher, to $2.2350 today; the price has been
above $2.00 for more than five weeks. Butter futures continue to advance to catch up
with the spot price, bringing the fourth quarter average to $1.9942. OCT-DEC
futures have risen steadily since early February, climbing from $1.55 (see chart) .
Meanwhile, cheese prices head into the final week of the third quarter holding steady
at $1.75 for blocks and $1.7350 for barrels. The only activity today was an uncovered
offer to sell a load of barrels.
Again all these prices are near record highs.  $2.23 for butter is unheard of with it coming I believe within 14 cents of the all time high  ( i think I will go back and check for sure)And you have to like the fact that cash is leading futures.

And cheese at $1.75 is certainly something to be very happy about.  But again as we look toward next year especially that Feb -May time period we can see the dark clouds.  But maybe they will get pushed away with these high feed costs.  They will certainly hold down expansion fears as the variable expense will be hard to overcome with the current price of milk. 

One other observation about our trip. 

Wow is there alot of, well, big folks out there.  And while I was at walmart there was a line for those little shopping scooters!  Folks can't even walk to get there food!  So I am thinkin it is time for food prices in America to rise so that we can limit the expansion........of our waist line!

Oh yea we got the birthday gifts bought  and I bought  Larry the cable guys movie Health inspector That guy cracks me up! BE safe JR

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dairy mom
Veteran Contributor

Re: From the parlor pit 9-28

simple answer to your question of why people buy milk on price not quality.  Simply because milk is so well regulated that people are confident of the quality no matter where they buy.  Therefore price is the driver.

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