Posted on 09/08/2014 6:59:39 PM PDT by SoFloFreeper
Milk futures rose to a record high price Monday as exports by the U.S. climbed amid shrinking inventories of cheese and butter, signaling higher costs for pizza and pastries.
The U.S. shipped a record 17 percent of milk production in the first half, according to Alan Levitt, a spokesman at the U.S. Dairy Export Council. Cheese stockpiles in July dropped 8 percent from a year earlier, and butter supplies tumbled 42 percent, the Department of Agriculture said last month. U.S. dairy costs are higher than world prices, signaling imports will increase, said Jon Spainhour, a partner at Rice Dairy LLC.
(Excerpt) Read more at moneynews.com ...
Obama must hate poor people. Someone alert Kanye West.
I didn’t get from the article why. Is it a capacity issue?
Milk is RACIST!
This article says $3.65/gal. It’s bounces around 4.20-4.50, and at a convenience store 5 bucks.
Blame ethanol made from corn, based on a stupid mandate from congress they refuse to change despite all signs leading to disaster.
When cattle ranchers and dairy farmers cannot get adequate corn, they feed their cattle less nutritious blends of food. This not only means that cattle are leaner and their meat less tasty and more expensive, but that there is less milk fat in their milk. And less milk. So less butter. And the price of milk and butter go up.
The other factor is increasing demand for US milk and dairy products by other countries. If farmers make more money exporting, they export.
Continued ethanol mandates consuming corn crop. Corn crop and other animal feeds down due to serious drought in the West. No food for animals, high milk prices.
Stalin did this too. Starved millions. The left uses stuff like this to point out the faults of capitalism. Somebody wants higher prices, so the consumer gets shafted.
It still goes back to ethanol. If the government didn’t intentionally waste a huge amount of corn, then farmers could adapt to higher production *and* export. But by diverting animal food to alcohol, it stresses the beef and dairy markets.
It forces them to make the choice of selling domestically at a lower price, or exporting for a higher price. I’ll add that though the other food was not as nutritious, don’t think it was cheaper, because it was actually more expensive than corn.
And the cost of that came out of the farmer’s pocket before he made any money.
I just knew an agricultural economic genius would jump in with an explanation.
Now try the explanation again, this time with the facts as they exist.
Weave in that corn, which was about $8.50 a bushel a year ago is now at under $3.50.
And we have MOUNTAINS of corn coming this fall, more than our transportation system can handle. More than we can use, even if we burn a lot of it to heat our homes and fuel our cars.
The mountains bit will be real, in every little town across the plains we will have mountains of corn piled up.
See post 10.
The challenge I presented in post 10 applies to you too.
Milk is $2.50/gallon at my local Kroger this week. It is never more than $3.26/gallon.
If you feed cattle all the corn they want to eat and more, how long do you think it takes for them to recover lost weight? Instantaneously?
http://online.wsj.com/news/articles/SB10001424052702303287804579445311778530606
March 18, 2014: “In the U.S., much of the rise in the food cost comes from higher meat and dairy prices, due in part to tight cattle supplies after years of drought in states such as Texas and California and rising milk demand from fast-growing Asian countries.”
Nov 20,2013: “Late last Friday the EPA stunned America’s corn interests by not only refusing to increase the ethanol mix, which is 16.55 billion gallons for this year, but also proposing to actually cut the mix to 15.21 billion gallons for next year. That’s 14 percent lower than Congress originally envisioned...
“Fuel production now takes up around 40 percent of the U.S. corn crop,” London-based Capital Economics wrote four days before the EPA announcement...
“And given that U.S. refineries refuse to produce petrol with more than 10 percent ethanol for fear of damaging vehicle engines, this should reduce demand for ethanol and in turn lower demand for corn.”
So the bottom line is that the meat and dairy industry was weakened by drought, then hit with the double whammy of lack of corn. Many ranchers and farmers culled their herds. At the same time foreign demand was increasing.
Now, *since late last year*, suddenly there is a surfeit of corn on the market. So, in practical terms, it may be two or three years before this has any impact on ranches and farms. And all the while, that foreign demand at higher prices will be there.
N.B.: I was an agribusiness student for a while. Not quite a genius in the subject, but far better at analysis than a layman.
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