Friday, July 31, 2009

USDA Raises Support!ut/p/_s.7_0_A/7_0_1OB/.cmd/ad/.ar/sa.retrievecontent/.c/6_2_1UH/.ce/7_2_5JM/.p/5_2_4TQ/.d/1/_th/J_2_9D/_s.7_0_A/7_0_1OB?PC_7_2_5JM_contentid=2009%2F07%2F0355.xml&PC_7_2_5JM_parentnav=LATEST_RELEASES&PC_7_2_5JM_navid=NEWS_RELEASE#7_2_5JM

Well, the latest news is USDA’s announcement increasing the Dairy Product Price Support Program (DPPSP) levels.

Immediately, prices went up on the CME. Well, butter did not go up. And, if you notice in the announcement, there was no increase in the DPPSP for butter. Once again, there seems to be no “official” note of the fact that cows give both skim and cream.

Nevertheless, the rise in cheese and NFDM price will translate into bigger farm milk checks. Will this be enough – probably not.

For a bureaucracy dedicated to status quo any movement is a minor miracle.


  1. Correct me if I'm wrong, but doesn't that mean the gov. is buying cheese. And won't that translate into still lower prices?

    And why did it take so blessed long for the Ag. Sec. to do anything?! Sorry I just came here after going to Hoards. They always tend to make me a little tizzed.

  2. Here's how this deal is gonna work. Say you have a few carloads of cheese you "transacted" at CME to hold the price at $1.10. Now you can unload that cheese to CCC for $1.31 + another make allowance of I think $.10 to .13

    44,000lbs x 1.10 = $48,400 cost.

    Sell 44,000lbs at 1.31 + .11 = $62,480.

    Roughly a 22.5% gain. If you can swing the deal within 2 weeks that translates into a 585% annual return on investment.

    But wait, there's more---as the new cheese price starts to work it's way thru the FO system by say October, you de-pool and VOILA! The dairy crisis is solved.