Saturday, October 24, 2009
Global or not
(click on image to enlarge)
With the aid of imprudent borrowers, Wall Street brought down the economy. This act of sabotage was rewarded with taxpayer’s money funding a bank bailout.
Dairy farmers may have received some taxpayer money in the form of MILC payments, still it is nothing compared to with the bank bailout.
USDA is ready to blame low farm milk prices on the Wall Street failure as if there was some divine guidance in the whole debacle. For instance: “this year’s collapse in the all milk price was brought about partially by the collapse in world demand and partly by decreased domestic demand as a result of the U.S. recession.” See: http://www.ers.usda.gov/Publications/ldp/2009/10Oct/ldpm184.pdf (page 9).
Maybe. Farm milk price in the United Kingdom fell from January 2008 to August 2009 a total of 9.9%. In the U.S. the drop farm in farm milk price was 41.4% for the same period.
American dairy farmers have lost an immense amount of income but, equally important, equity has shriveled to the point where borrowing is an impossibility. One area where equity has fallen is in cattle prices.
Close cows in the U.K. have dropped only about 5% this year. See above graph.
The tragedy in the U.S. dairy farm community need not be exaggerated to see that U.S dairy farmers are bearing, a needless load.