Wednesday, May 20, 2009


Two important factors suggest dairy farm costs will increase significantly. The first is grain.

Planting in the Eastern Corn Belt has been delayed by weather. Additionally, the government may increase the fuel ethanol requirements. Many people are thinking $5 per bushel corn will seem like a good deal in the fall.

Then U.S. light crude for July delivery settled at $62.04 a barrel, up $1.94, the highest since Nov. 10, 2008.

The jump in crude is being attributed to a supply report by the U.S. Energy Information Agency (EIA) regarding stocks. However, EIA’s own data shows 25.6 days of crude oil stocks as of May 15, 2009. July 4, 2008 there were just 19.1 days.

Crude tends to be heavily influenced by changes in the stock market and the value of the U.S. Dollar compared with other currencies. The market has risen and the dollar has fallen.

The White House “comment line”, where you can speak to a live person is 202-456-1111. Time to call.

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