Saturday, June 12, 2010

Dairy Trends



(click on image to enlarge)

Most thoughts on "dairy trends" are a matter of opinion. The above graph is not so. The above graph takes USDA dairy farm numbers from 2000 - 2009 and then as a matter of math and statistics, I have constructed a linear trend.

By 2024 there will be no more dairy farms - plain and simple.

The scary part is that there was plenty of warning about the financial collapse. There was plenty of warning about Bernie Madoff. There was even warning about the Gulf oil disaster in 2000. No one has to be told the government did nothing in advance of crisis.

As with all the above, the government allowed big corporation to select the riskiest, and therefore most profitable, direction for dairy.

There is no plan "B." There is no backup. Certainly, USDA and most of the experts can fall back on the old "market forces" excuse. However, the reason there has been no realistic examination of the CME is that USDA knows full well "market forces" have no clothes - embarrassing and ugly.

There is a wealth of scientific evidence on what is called "change blindness."

http://scholar.google.com/scholar?hl=en&q=change+blindness+&btnG=Search&as_sdt=400000&as_ylo=&as_vis=0

However, USDA and other policy formulators have their eyes closed. We are daydreaming toward tomorrow.

14 comments:

  1. Apparently we only need one dairy farm, with about 9 million cows on it, let's see who can get there first.

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  2. Excellent chart, but I think it is wrong, I believe if NMPF plan comes to fruition we will be gone much sooner than 2024. In the past NMPF and IDFA would disagree occasionally on policy and look where it got us, now that they are working together our demise will be even swifter. Kozak is evil and needs to go back to IDFA.

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  3. Family Dairy in IdahoJune 13, 2010 at 8:26 AM

    I would like to add my thoughts this morning to one of the paragraphs in your post today. As with all the above, the government allowed big corportation and "banks", with their own type of blindness {greed} to select the riskiest, and therefore the short lived profitability for each of them and in the process irrevocably changed forever the lives and future generations lives, of thousands of families who lived and worked on dairy farms. The farm families, the gulf families and the working families of this country, who are or soon will be unemployed along with millions of other families, through no fault of their own,{greed of others} were the backbone of this country. And we wonder why this government acts paralyzed and unable to stand up to the corporate greed, no backbone?

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  4. Don't need to wonder. Look where most of the influence comes from in Washington. If the people who are in charge of overseeing the corporations didn't previously work for those same companies they will be on payroll as soon as they leave the gov't position. Some could even speculate they are still/already on the payroll. We are almost to the point of losing for the people, by the people and are quickly becoming for the greedy, by the greedy. Something Glenn Beck said here a month or so ago was, Are unions good, yes, are businesses good, yes, are there bad unions, yes, are there bad businesses,yes. At what point did they go bad?, the moment the leaders and the executives decided they were in it for themselves. Now dairy farmers, reread that and insert co-ops for unions and processors for business. To me anyway, that pretty much sums it up. It's not a matter of backbone. It's a matter of the foxes really are guarding the hen house. They have not, and will not, do anything to bring their own to justice.DWCovert

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  5. At some point though, there will not be enough money to go around for the masses to buy their products, so what will they do then to show a profit for their investors? You can only cook the books for so long.

    Most companies will look to China or wherever the new money is flowing and forget about the US and the people that gave them their start.

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  6. I believe small dairies processing their own milk will be the future. A small dairy that keeps it products simple, puts its cows back in the pasture,and does most of its own labor will thrive. Nothing against mega dairies it is just that they have too much milk to try to market themselves and they will be left to the mercy of the processors.

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  7. I agree that direct access to the consumer by small producers is a viable option, for awhile. It doesn't take long for it to attract the vultures though, and before you know it what you are doing is harmful and endangering the public, next thing you know it's illegal. Unless we can get big money out of our political system, I don't see a very optimistic future.

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  8. I went to p. f. yesterday to order milk for county fair. When I told him price was too high as we are going broke he actually laughed and said "what about all the money you have been making in the past-it was ok then" he actually didn't have a clue!

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  9. Concerning attitude of the government, the atmosphere at a meeting I attended was on of, "If you don't adapt to change, don't come crying to me". Vislick was there, but I got the impression that he frowned on any negative complaints from farmers.

    What he doesn't understand is, some coops require farmers to cough up equity to join to the tune of $10,000.00 per 1 million pounds of milk shipped. The coops have forgotten about representing the farmer and have created "side ventures" from gambling on derivatives to opening other branches that "claim" to be farm related, but are only feeding the monster. CWT is a fine example of that. How do we know that a friend from the country club needed a job and an exec at the coop created a business, gave it an acronym and handed it to the friend on a silver platter, along with a fat budget (provided by the farmer) to go along with the hefty compensation.

    These side businesses are formed to skirt the bylaws of the original coops and are run by the coops and I am betting the "friends" never really have to show up for work.

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  10. The DFA news letter states "created by and is owned by nearly 17,000 dairy families". Not that long ago it was 18,000 and I like the word "nearly", so that means 16,000 range.

    Are the farmers going out of business or are they finding other coops/ways to market their milk?

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  11. Beleive it or not some California farmers are leaving their current viable transparent successful coops and going to DFA. They offer a premium program based on quality (which of course they determine) and the farmers blindly follow. I can only beleive that these particular farmers either don't follow industry news and investigations against DFA or they're just stupid. How much do you think DFA's legal bills are?

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  12. You mean the legal bills that are paid for by the farmer? Where else could a company have their defense paid for by the ones that are filing suit against them?

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  13. Please don't be fooled into thinking Vilsack isn't aware of everything going on in this industry. The big difference is dollars, and the farmers don't have them.

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  14. Are you speaking of the dollars that line pockets?

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