Friday, June 12, 2009

Obscuring the facts

Chart by Dairy Market News
(click to enlarge)

How many traders does it take to make a market? If the average dairy farmer knew how many entities are buying and selling cheese on the Chicago Mercantile Exchange they might not revolt, no time for that, but, they would be more angry, if that could be possible.

The whole charade is reinforced by the so-called National Agricultural Statistics Service (NASS) survey. USDA will tell anyone who complains about the CME, farm milk is not priced from the CME, farm milk is priced from many plants surveyed by NASS.

Here's how it works. The CME sets the price for block Cheddar on any given day. A plant which takes an order that day quotes the CME plus a formula. When the order is completed, NASS surveys the order as it goes out the door.

So, NASS is really CME plus a time delay. As the GAO said in their 2007 report on the CME, the NASS survey is a redundancy. Honestly, it is part of the con-game.

1 comment:

  1. Con; to swindle, trick, persuade by deception. We surely are being conned, and I agree we have no time for revolt, (too busy taking care of cows for pay that is much less than free) at least we can't revolt in the common sense of the word.
    But maybe we have time to agree?
    Agree first that we need to be united and speak as one voice.
    Agree second that we need to change things ourselves and can't rely on others to fairly do our bidding (the dairy co-ops and procesors raping us now surely can't be trusted, if they were honestly concerned about our wellbeing milk prices would never have gotten this low).
    Last but not least, agree as dairy farmers, on where we are going with our industry and how we are going to get there. Denying product to the marketplace will always have to remain on the table as it is our single biggest lever.
    Jeff Suehring.