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| I track dairy as part of the overall food picture but am certainly no expert, but do have a personal opinion. Milk production, when corn was $1 lower was projected to increase less than 2% in 08 but sufficient to pressure prices, I would estimate, a max of 10% during the first 1/2 of this year; however, higher feed costs will eventually have some effect and if the dollar remains on the defensive exports should remain strong. We are entering a seasonal period when the US dollar usually shows some strength (through early March), so that is expected....in the 1973-74 period..once we achieved some equilibrium the livestock prices, particularly cattle as we left the old $26-$28 fed market advancing into the $40's in response to early inflation...at some point, don't know when, I would expect pork production to be affected, in the form of reduced production, as well as items such as milk...the folks that sold into that first price increase as hedges got killed as input costs continued to rise. I think it was R. Reagan who said lower taxes lift all boats...I would think dairy would be one of the future boats, at least to hold its own at the worst. A lot also depends upon whether the Federal Reserve can create a fancy dance step to get out of the current pickle & prevent a recession. | |
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Early thoughts.
