Corbitt Wall feeder cattle report for Feb. 25

Flashback one year ago. The sting of 2009’s equity loss inflamed many in the industry who called for dairy reform. Ideas were plentiful, and support groups had formed around a few of them. When Foundation for the Future was first announced early in 2010, it didn’t have its current name, or even its own logo. We started calling it NMPF's plan.

How much is my milk worth? It depends on who you ask. A milk producer will answer based on the incurred costs of producing the milk, but a buyer of milk, such as a milk plant, will answer based on the value of what the milk goes into. End-product pricing of milk, back tracking from the value of finished products down to a milk value, underlies both the FMMO and California minimum prices. Though modified and tweaked to meet policy goals and practicality, the formulas are straightforward: Product price less a manufacturing cost times the pounds of product from a hundred pounds of milk.

Like any good story, the dairy market complex has done a good job of keeping viewers in suspense. Here’s the most recent storyline: As farm profitability drops to dismal levels, dairymen view positive returns as a remote possibility, something to hope for in future years instead of this one. At that moment, the market finds a way to spring back to life and provide producers with enough return to keep both them and their cows in the game. Since the 2009 cycle low, three such incidents have occurred just in the nick of time.

A nasty ice storm couldn’t keep dairy producers and industry representatives from attending the 2011 Pennsylvania Dairy Summit, held Feb. 2 and 3 at the Lancaster Host Resort and Conference Center. Hosted by the Professional Dairy Managers of Pennsylvania (PDMP) and the Center for Dairy Excellence (CDE), the event featured several speakers, a few of which had to use Skype to present to the group after their flights were cancelled. Click here to see photos from the 2011 Pennsylvania Dairy Summit.

Here’s another great question overheard at the Kimberly, Wisconsin, commodity marketing workshop taught by the advisers of Stewart-Peterson: Q. “How does LGM dairy insurance fit into my approach to marketing?” A. MARK LUDTKE: Great question, and one we’re hearing more frequently from clients. Lenders want and need their client farms to manage risk. In an effort to accomplish this quickly, they are taking a look at LGM insurance. With all the management stresses on today’s dairies, it is certainly understandable that producers and their advisers would pursue what seems like a quick and easy route to managing risk.

I confess ... the older I get, the more cynical I become. Maybe it’s because I truly care about how our elected officials run the government or because I actively participate in the economy. Graduating from college ten years ago, my friends and I had a carefree, “No Regrets” approach to life. Nothing that happened really seemed to affect us, so we weren’t too concerned with what was going on in the “grown-up world.”