Friday, November 5, 2010

How Low?

By asking the question, how low, I do not intend to guess out future CME prices. The question I am asking is how low will the powerful stoop relative to human decency.

Today's CME prices indicate there is no honor among the thieves. Trading a few loads on the CME impacts supply/demand hardly at all. Anything traded on the CME could be traded off the CME. This can and does happen all the time. The only thing trading at the CME really affects is farm milk price.

December Class III is $13.56.

Blocks today are $1.48. For comparison world price (FOB Oceania) is is $1.86.

Butter fell $0.27 today to close on the CME at $1.88. World price for butter adjusted to 80% butterfat is $2.32. No One can make the case that there is too much butter.


  1. Next week might get a bit uglier with rumors of cheese not selling and heading to the exchange. I will let you guess who will be selling.

  2. The real fundamental problem is the fire sale surplus cheese sold on the CME sets the average market price for all cheese. How can politicians just allow this tilted market to function in this country? The free market folks are not seeing reality.

  3. With all the money that flowed from dairy movers and shakers and multi-national corporations into the newly elected free trading congressional campaigns, I would've suspected our prices to tank. Just emboldens the thieves!

  4. What I find almost unbelievable is the drop in butter was from a SINGLE TRADE!!!


    The only way I see left to right this sinking ship is for all farmers to TOTALLY STOPPING SHIPPING MILK!

    One week would see the store shelves starting to go empty and the public outcry will be heard all across the nation.

    Steve Barton

  5. Why wouldn't our Coop buy the cheese at the CME for $1.48 and resell it to Oceania for $1.86 and pocket the difference and distribute that money in the milk check?

  6. what is a free market and what is a free market folk? Dairy is anything but a free market.

  7. Someone actually had to sell one load of butter so bad that they were allowed to lower the butter price by 27 cents? Does (stupid question I know) CME have absolutely no oversight or scruples? Did no bells go off when this atrocity happened? This is so bold faced it had to be a test to see if anyone was looking. Who did it?

  8. Comment to the Coop man.

    Do you really think the share of this sale you MIGHT get back from your Coop will offset the huge drop in the blend price?

  9. I don't understand the comment about the blend price... the prices are where they are, and if someone could buy cheese at the CME and sell it to Oceania, wouldn't it be a good thing to take that profit? Why isn't someone doing that???

    As to the butter comment, I thought it was suspect when the butter price went up to $2.20 with virtually no sales... I also don't understand how a butter coop wouldn't just buy the one load and stop the price drop, wouldn't that have made sense??