Some additional information on what's happening to the US dairy industry from an extended, sobering personal conversation I had tonight. Adding to this earlier post...
Those are main take home points. Now add increasing food and energy shortages...our debt situation. Could argue this could be optimistic (or things may become more dire to producers and consumers).
Put this way...got powdered milk...a cow or access to a cow?
FWIW...local insider personal opinion is prices may not only double...but even triple in some markets due to shortages and projected feed and energy costs. May be permanent reduction in production as producers decimation of equity and debt not sustainable or replaceable...even if credit is available later (we know this highly questionable).
Maybe there are others who can provide more information on this.
The New Frontier bank failure in Greeley, CO as reported in a recent Daily Digest was due to defaults in the dairy industry. The repercussions have been felt throughout the N.E. Colorado economy (the fifth largest in the U.S.)
My understanding is that the milk prices dropped roughly 30% from Dec. to Jan., literally overnight. The golden era of easy money and too much caffeine ($4 lattes) fueled an overabundance of expansion and supply. I believe this to be the common denominator in most industries thus the widespread downturn in the entire economy.
Good thing there is a Jersey, a Holstein and a Brown Swiss in my pasture.
This was the lead story in today's Denver post
The phone calls usually come in the evening after the machinery goes silent on farms across the country. The callers speak of dwindling cash flows, crumbling marriages. Some admit they're holding a loaded gun.
Across a wide swath of rural America, increasing numbers of farmers are considering taking their lives.
The nation's largest network of crisis hotlines for agricultural workers reports a spike of 2,000 calls through May compared with the same period last year — a 20 percent increase.
In Colorado, the number of suicides among farmers and ranchers has risen in the past five years: Fourteen took their lives in 2008, twice the number reported by the state's coroners in 2004.
"The increase in calls really started with the change in dairy prices, as they fell last fall," said Mike Rosmann, a clinical psychologist and farmer who heads the Iowa-based Sowing the Seeds of Hope help line serving farmers in seven Midwestern states. "We're starting to see the stress mount. It's a nationwide problem."
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