People Have To Eat

(click on image to enlarge)

The above graph, plus the current price of corn says we are heading for a cliff.

In America, the food system runs on corn. Even dairy is heavily dependent on corn. Although there are some grass based dairies, the larger operation providing the most milk all go heavy on grain, particularly corn.

So what does $6 corn mean? There seems to be little wiggle room. The retailers have no room to raise prices. At the same time the per capita beef is the lowest since 1952. Pork is about the same.

A the production level dairy, including the support business are bleeding badly.

Needless to say, the bulk of the public is in trouble financially. Can most of the public pay more? Can dairy farm margins be less - NO.

Is there any leadership - NO.

How Many

http://www.cepr.net/index.php/blogs/beat-the-press/how-many-reporters-would-work-for-the-washington-post-for-1025-an-hour

How Many Reporters Would Work for the Washington Post for $10.25 an Hour?
Print
Sunday, 10 October 2010 07:33
AddThis

According to the Washington Post, if the answer is not many, then we need to bring in immigrant reporters. That is exactly the logic it used in a discussion of the fact that most native born American citizens are unwilling to do farmwork for this wage.

Economists would ordinarily say that the lack of a labor supply at a given price suggests that the wage is too low. However, the Post only considers this fundamental economic principle in passing. It is likely that if farmworkers received $60,000 a year, with health care benefits, there would be no shortage of U.S. citizens willing to do this work.

Of course this would raise the price of farm products, but it would be much cheaper to advertise in the Washington Post if its reporters worked for $10.25 an hour. The lower cost of advertising would be passed on in lower prices for groceries, cars and other items advertised in the paper. At least this is what people who believe in economics would say.

Barrel Cheese Down

Today, October 11, 2010 Barrel Cheese slipped a quarter of a cent to close at $1.7350 per pound. No cheese traded hands. The action happened on an offer.

http://www.hoogwegtus.com/

We work aggressively to bring VALUE . . .
Our daily involvement in every aspect of the dairy industry around the world makes us uniquely knowledgeable about the market conditions that will affect your business. Working together, we help manage your costs and maximize your returns through our creative products, marketing, and finance arrangements. Your success ensures our success!

Of course, there has to be some movement in price so as to convey legitimacy.

Smart

http://tvnz.co.nz/business-news/sellers-but-no-buyers-dairy-futures-3830436

"The much anticipated debut for dairy futures trading on the NZX ended its first day without bothering the scorers."

"The new global whole milk powder futures contracts, which range from one to 18 months' duration, attracted several sellers, according to an NZX spokeswoman, but no buyers by the close of business on Friday."

More at link.

Fluid Milk Sales

(click on image to enlarge)

Dairy Market News yesterday published a corrected version of fluid milk sales.

The interesting part is these in organic sales versus conventional milk. One possible explanation is the variation in unemployment rate. Currently the unemployment rate in the bottom 10% of income categories is 30%. For those over $150,000, unemployment is hardly a problem.

IDFA "Study"

There is a new study commissioned by IDFA on supply management. It is available at: http://www.idfa.org/files/Informa_International_Comparison_Supply_Control_Impacts_0910.pdf

For those wishing to get right to the conclusion - IDFA is not in favor of supply management. I honestly don't know anyone who prefers supply management over a functioning market system but, we have a dysfunctional market system which IDFA constantly defends.

DIAC Papers

There are some papers related to the September 2010 meeting of the Dairy Industry Advisory Committee (DIAC)available at:

http://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=dia-mt-sp2010

I think there will be no surprises from this exercise.