Dairy Profit Weekly Editor Dave Natzke reported in Friday’s broadcast that high commodity prices are behind most of the trends as better returns from corn and soybean crops add to income and farmland values.

Each quarter, Federal Reserve Banks in much of America’s heartland survey lenders on agricultural credit conditions, according to Natzke, and the third quarter showed sharp improvement.
According to those lenders, economic conditions improved from Texas to the Corn Belt. For example, Iowa farmland values were up 13 percent compared to a year ago, with Indiana and Michigan values up more than 10 percent. Kansas and Nebraska farmland values were up more than 10 percent; and irrigated cropland in the Dallas Federal Reserve bank region was up more than 8 percent.

“While much of the increased value is being driven by farmers seeking more land to grow high-value crops,” Natzke charged, “The lenders said record-low interest rates are helping boost demand, and non-farm investors are also finding farmland a good investment, due to appreciating values. Throughout the Heartland, bankers also report improved loan repayment rates, with a decline in loan renewals and extensions.”

But, as we stated at the onset, while the rosy economic outlook for corn and soybean-producing areas is improving, dairy is another story.

Dairy producers continue to struggle with higher production costs and narrow income margins.

In Wisconsin, for example, farmland values increased just 3 percent compared to a year ago, with quarterly increases up just 1 percent, Natzke said. In the Chicago Federal Reserve District, Wisconsin was also the only state where the trend in forced sales and liquidations did not reverse from a year ago, and one-third of the bankers responding to the survey predicted additional legal resolutions to outstanding farm loans, he concluded.

Milk price up a little from November 2009
That said, Thanksgiving Day still gives much to reflect on and blessings that even dairy farmers can be thankful for. Besides the obvious blessings of family and friends, health, and strength, National Milk’s Chris Galen reflected in Thursday’s discussion regarding milk prices which at least, this year, are up from a year ago.

“Last year was probably the worst in the lifetimes of most dairy farmers in this country,” Galen said,” and he reported that the Farm Bureau’s annual survey of what it costs to make a typical Thanksgiving dinner is up from a year ago.

Galen said that, “In some respects, it’s good news because it means dairy prices for things like cream cheese, butter, and milk are higher and they needed to be because farmers couldn’t survive at the price levels where they were a year ago.”

He warned that the U.S. economy is still fragile and, as consumers struggle, so do farmers.

The best news, according to Galen, is that National Milk has used the past year to make progress on necessary reforms in dairy economics and dairy pricing.

There’s more work ahead, he said, but as the year winds down, we can be thankful for the momentum for change that’s been building and details are being worked out in National Milk’s “Foundation for the Future” program.

We also called on DairyLine listeners to get involved in the process. Surely there are dairy farmers who have never written their Congressman or Senator and lawmakers need to hear from their constituents because, as Galen pointed out, “Congress will have a whole slew of things to look at next year, especially the budget, and a lot of other issues.”

There’ll also be a lot of new members, he concluded, “So in order to get their attention and to make dairy policy changes a front and center issue, we need to make certain that people contact their members of Congress.”

Producer responds to New York Times article
Pennsylvania dairy producer and chairperson of the National Dairy Board, Paula Meabon set the record straight in Monday’s “DMI Update.”

Meabon responded to recent inaccurate reporting from the New York Times and various other media regarding the dairy checkoff.
She stated that, as a dairy farmer, she wants everyone to know that the dairy checkoff is a program of dairy farmers. It’s for dairy farmers, and is directed by dairy farmers and none of the funding is from USDA or taxpayer dollars.

“Dairy farmers promote their own program,” she said. “We pay for our own programs,” and she added that DMI program are directed to the health and wellness of all consumers, children and adults but the mission of the dairy checkoff is to increase demand for U.S. dairy products on behalf of dairy farmers.

She reported that 50 percent of the checkoff budget goes toward the advancement of health and wellness, be it the “Fuel Up to Play 60” campaign or the development of low fat, lower sodium cheese, or the reformulation of chocolate milk to fit the government’s dietary guidelines.

For more information, log on to www.dairycheckoff.com
The beef checkoff got high marks Wednesday from Vermont dairy producer Jane Clifford.

“The beef checkoff is very important to dairy producers,” Clifford said, “Because a portion of our income comes from cull cows so that’s a sale of beef and it’s a significant portion so it’s important that the beef industry is strong.”

The Clifford dairy has been in husband Eric’s family for eight generations, she said, and is medium sized, milking about 220 cows three times a day. She said they are very thankful to be dairy producers and take it seriously. That means good care for the animals and of the land because “those are our assets that we are using for a short period of time and then somebody else will use them.”

She believes that message is being taken to consumers via the beef checkoff and admitted to be frustrated when people suggest that farmers don’t take good care of their animals or land.
“Those are our biggest assets,” she concluded, “And if we don’t take good care of them, then we won’t be in business.”