Wednesday, October 21, 2009

The Fed

The Federal Reserve is the central bank of the United States. Several times a year the "Fed" publishes the Beige Book which covers current economic conditions in the U.S.

Below is the bulk of what is said about dairy:


Agricultural conditions were mixed. The sugar beet harvest was larger than previously expected. Montana winter wheat crop planting was ahead of schedule. Favorable growing conditions occurred during September across most of the District. However, parts of western Wisconsin and Minnesota were in severe drought, and the progress of harvest of major District crops was behind the five-year average. Meanwhile, cattle, dairy and hog producers’ profit margins have been squeezed.

Unless I have been misled, bank's function to loan money. However, dairy farmers are not only being "squeezed" but also, most can't presently get a loan for anything.

Credit is a huge problem in agriculture and particular animal agriculture. Banks are not likely to start loaning to dairy farmers again until farm milk prices are up and , equally important, steady.

1 comment:

  1. Squeezed?
    dairy and beef are in the shitter. Pork is vertically integrated, supposedly the most efficient and best way to go in this dying industry. I believe it was Jeff Suehring who said "eat all you can now". wise words Jeff, seems like better advice all the time.
    Robert lieb