from the parlor pit 5-24

[jrsiajdranch]

Some thoughts about last week and somethings going forward.

Last week started out pretty rough with both cheese and butter taking a hit. Cheese was still above  resistance lines however butter moved down for the first time in weeks.  By tuesday night many were very concerned that we would fall out of bed. But for the week we held steady and even moved up some.

Nass survey prices for the week ending May 15

blocks down 1.42 cents

Barrels up ,73cents

butter up .31 cents

NFDM up 1.46 cents

dry whey up ,46cents

Class 1 base price for June is 15.28 up $1.49 from May ( this is a big move) The highest level since January of 09.  Basically an 18 month move towards the up this is usually how long the market forces take to work. 

The cold storage report also showed butter stocks were down 14% from a year ago! This is huge folks.

Saturday we finished first cutting hay for the cows. (i have a couple pics up of my son mowing hay over in machinery talk.)

I also had to take my middle son to a 4-H meeting over in Algona (Lego club meeting). Well as most eleven year olds do he told us about an hour before it was time to go that he was supposed to bring the snack for after the meeting.  Well mom was leaving so no time for her to make anything and I don't cook. So Dad thought it's warm out I'll go to Fareway and buy some ice cream snacks ( son said good thinkin dad).  I went to buy them and was suprised they had almost sold out of thier Ice cream products by noon on a sat. That was a good sign in my estimation for the increase in demand we are seeing out there.  The warm and humid air that is setting over the midwest right now will not have a great impact on milk production unless it continues for another week, but it does show that unlike last summer we may very well have some heat. The warmer it is with higher humidity will over the summer cut into milk production. and that will cut midwest cheese yields.

On an international note the week it was mentioned that with the dryness in Oceania thier season is coming to a halt much more quickly than anticipated. Proccessors in NZ are using milk from organic farms to process into thier milk products especially cream as they do not have enough conventional milk to meet manufacturing needs. 

All of these things combined point to higher prices ahead. I am bullish but not to the point of calling for 20 dollar milk I just see a steadily rising market. I see the marklet as giving us all  free put right now locking in prices right now will not allow you to lock in a profit on most farms with feed costs and fuel being where it is at right now.  So I still am staying off the board and watching for signals that these markets have topped. I do not see that right now.  Have two cows going to mkt. today not the most fleshy or big cows but they are still leaving so we will have some cull prices to report later. also sending in the hay samples today should have results on those by weeks end. Thats all from the parlor pit happy milking. and please buy some more Ice cream. JR

[behog]

I sold 8 cull cows last Thursday.  They brought between 58-66 dollars cwt.   Earlier in the week I bought 5 very good Springer's.The check from the cull cows covered the five very good Springer.   With this meat price I have been forced to cull my herd harder then ever before.  I probably have the best herd ever..  because of the meat price.

I am bullish on milk, and Springer prices.  I am in the process of borrowing some money to increase my herd.  The weather has been good and it looks like I am going to have plenty of feed.  And I have plenty left over from last year. 

I have struggled the entire time that I have been farming. 10 years this fall it will be since I started milking.  I know many will think that I am wrong for increasing my herd and adding to overproduction. But I have to take care of myself.  My debt is getting really low but my profit has not increased much.If I had to go through last year 8 years ago I would have went bankrupt.  So I am pushing for more efficiency.  The milk price will come back.I think the world economic situation is holding back the milk price now.  It may be a while till it comes back.  But the longer it takes to come back the bigger the rally will be.

[scmn]

what do think of the 400000 scc limit.  heard that 20% of the cow herd will be going to market.

[jrsiajdranch]

Behog glad to see you made it over! I agree on the meat price I sold two heifers today you know the kind you hope no one knows are yoursLOL.  THey were real typy animals just not real big. One had a beautiful udder on her only 1 and a half spiggots worked! She brought 52 cents the other one just never figured out her calling in life a little bigger but just always looked "dumpy" she brought 47.  I knew the markets would be off this week with the pack being bought up for the holiday weekend and with a short work week for the kill lines next week. But sometimes you just need the money!

I agree with your analysis on buying more cattle My wife and I are considering adding also. only thing is it will take some additional building. and if I chop all my corn feed won't be an issue but then I have to buy all my grain.  SO I am still putting numbers together. 16/cwt doesn't give us much room to breathe and I sure would like some more of that right now. 

Main reason I am looking toward expanding this year is the cheap interest. I don't think I will see it this low again in the next 10 years( or maybe my lifetime) Happy milkin. JR

[behog]

I thought it was just talk. Is it getting close to becoming law.  It really does not mean much to me. I have not problem staying under that. I guess it may put some out of bussiness and force some to do a better job

[jrsiajdranch]

SCMN I think it is still just a few blowing smoke.  Remember right now all our "fearless leaders" are looking towards any thing they can point to so they can show action on the low milk price.  IF they do it won't be a problem for me others maybe.  Also if you want to see a rule repealled fast just watch what happens when some mom is at a grocery store crying about the 6$ a gallon price tag on her milk!  Ands the best part is the "fearless leaders" won't get blamed. Oh No! US dairyfarmers will! JR

P.S. thanks for asking and reading I am trying to glean more than I offer here!

[scmn]

if the USDA wants to put regulations on our exports then they should do the same to all of the dairy imports that are coming into this country

[jrsiajdranch]

SCMN I rememberes something.  Our dairy co-op said to meet the requirement( remember this 400,000 limit only applies to the milk exported to the EU) It would be a logistical nightmare to move milk out of the normal channels that wouldn't meet the new Law.  You would still be able to produce milk for sale up to 750,000 only not for export to the EU.  So they wouldn't have any grounds to block milk incoming from NZ or the Aussies as they have no similar requirement. I learned a little more about the EU milk podwer and butter release last night from a contact in Europe I will update in the parlor pit later this morning. (Hows that for a teaser?JR