Cash for Milk Cows

[GMN]

I know of a couple of banks getting all their ducks lined up to call the notes on several dairy operators in Texas. Finding buyers for the cattle, equipment, etc. Most are pretty well secured and the market for the real estate should be pretty good but the livestock and equipment won't bring half what's owed against it as there is no market for the cattle or the equipment.

Thats just bad business for the Banks, hit a person when they are down, makes me sick! Anymore i think this whole world is going to the wolves.

GMN

GMN, I know these bankers well and I can assure you they have already carried these guys longer than their mother's did.

Lets give them a big round of applause, what do they think, calling notes is gonna get them their money any faster? I think they don't fully understand how bad it is right now for dairy farmers, if they did maybe they would find a better solution.

GMN

 

[TexasBred]

GMN the Stephenville, Texas area literally "lives and dies" by the dairy industry. Bankers have worked with dairymen for generations and know each other on a first name basis. These are old style country bankers and they have absolutely nothing to gain by foreclosing on real estate or calling notes on cattle etc. It's business and the banks will most likely take a big loss on the notes but prolonging it isn't going to cure the situation......I can assure you they've probably worked as hard WITH these dairies as they have with anyone but when regulators and/or boards of directors say enough is enough you just have to hope the dairyman (who may be your next door neighbor or son) understands. And most will. I feel for the dairymen but as a former banker and former dairyman I have seen both sides of the picture and neither side will be smiling much afterward.

 

[Dave]

The organic dairies, at least in this region, have a locked in price for a year. So they have faired much better. However, I was told the other day by an organic dairy farmer that they are being told that they are being cut back by 10% on production. So if they are shipping 10,000 pounds a day, it will be cut back to 9,000 pounds. With the economic slow down people just aren't buying as much of the high priced organic milk. At my grocery store organic milk is $5.00+ per gallon while conventional is $2.50.
I read the other day that while price is way down there are some areas where milk production has increased. July output from teh top 23 dairy states was up a surprising 0.1 percent. California was down 5% from a year ago. But Wisconsin was up 5.8%. New York production was up 2.8%. Idaho was down 3.5%. Western declines were off set by Midwest increases in production.

 

[john250]

Dairy, hogs, chickens and cattle are all losing money. Everyone hopes someone else will blink and cut production.
When supply and demand move higher on the price curve (soon, I hope) we will need every political tool we have to keep the govt from slapping price controls on milk and meat. Nixon did that, and he was a freakin' conservative. The guys in there now--it is a no-brainer to them.
Dramatically higher prices in the supermarket are what :?: a year away? I don't have charts or numbers, just opinion. Commodity prices turn so quickly, and once they turn they make big runs. Look where corn is, just over a year after hitting $7.50 it is under $4 and trending lower.
I see light at the end of the tunnel, but it may just be the train. :dunce:

There are lots of dairy and hog foreclosures happening and waiting to happen here. :cry2:

 

[HerefordSire]

Waiting for more gimmicks....looking for $9,999 sales because I can save $1,000 when in reality it is only $1 difference.

The government's "Cash for Clunkers" program was "ingenious" because it coaxed wary consumers into re-leveraging their personal balance sheet, Doug Dachille, CEO of investment firm First Principles Capital Management told CNBC.

Under more traditional economic stimulus programs, consumers are typically sent checks. The hope is that they spend the money and stimulate the economy. But consumers may opt to use the money to pay a bill or put it in savings, diluting the benefit of the progam.

With the 'Clunkers' program, not only did consumers spend the money now, they also committed to future spending as they pay off the cost of the new vehicle.

"That way you actually got leveraged stimulus," Dachille said.

That spending is important because consumers are trying hard to limit their spending in this new climate.

"What people are realizing is that your spending now is not going to be driven not by extraordinary, one-time gains and your ability to borrow against those assets on your balance sheet,...your spending is going to be driven by what you are earning," Dachille said. "...You can no longer spend in excess of what you are earning."

http://www.cnbc.com/id/32657142

 

[GMN]

GMN the Stephenville, Texas area literally "lives and dies" by the dairy industry. Bankers have worked with dairymen for generations and know each other on a first name basis. These are old style country bankers and they have absolutely nothing to gain by foreclosing on real estate or calling notes on cattle etc. It's business and the banks will most likely take a big loss on the notes but prolonging it isn't going to cure the situation......I can assure you they've probably worked as hard WITH these dairies as they have with anyone but when regulators and/or boards of directors say enough is enough you just have to hope the dairyman (who may be your next door neighbor or son) understands. And most will. I feel for the dairymen but as a former banker and former dairyman I have seen both sides of the picture and neither side will be smiling much afterward.

I understand, I know the Banks have their comfort levels where they can continue to offer operating loans, its not just the dairy business that is in trouble. Its alot of businesses that are being told by their lenders-sorry can't do anymore, then its find another way or out of business you go.

GMN

 

[TexasBred]

Sad but true. Especially for those that have made good decisions for years, managed and operated within their means and the check still does not stretch far enough. And then to make it even worse you have to leave the profession you have such a passion for and start live from scratch.

 

[GMN]

Sad but true. Especially for those that have made good decisions for years, managed and operated within their means and the check still does not stretch far enough. And then to make it even worse you have to leave the profession you have such a passion for and start live from scratch.

Yes this is exactly how it is, I feel for the dairies who have already closed their doors, and whats really bad about this is that it prohibits younger people from wanting to get into dairying, because of this very thing. Anymore I would not know how anyone could do as we did, start from scratch, just way too expensive.

GMN

 

[djinwa]

I have to wonder if there is a future for milk. In the lunchroom at work the other day, I watched several young guys drinking powerade and gatorade. I asked a guy how much his bottle (about a quart) of Powerade was, and he said about $1.33. So we're talking over $5 a gallon for some water, sugar, and flavoring, plus a few electrolytes to make people think it's healthy. Somehow people will also spend good money for plain old water in a bottle - maybe more than milk?

Some of the same guys who spend money this way make fun of those who drink milk (like me) - it's unnatural they say. I give it back to them about their "natural" sugar drinks, but I don't see myself winning. Just seems the overall trend is for more artificial everything. The future is in sugar.

 

[GMN]

I have to wonder if there is a future for milk. In the lunchroom at work the other day, I watched several young guys drinking powerade and gatorade. I asked a guy how much his bottle (about a quart) of Powerade was, and he said about $1.33. So we're talking over $5 a gallon for some water, sugar, and flavoring, plus a few electrolytes to make people think it's healthy. Somehow people will also spend good money for plain old water in a bottle - maybe more than milk?

Some of the same guys who spend money this way make fun of those who drink milk (like me) - it's unnatural they say. I give it back to them about their "natural" sugar drinks, but I don't see myself winning. Just seems the overall trend is for more artificial everything. The future is in sugar.

I think the stigma now is that all these speciality drinks are so cool to drink, I still prefer milk with cookies or donuts, there are just some foods you have to drink milk with. My favorite is strawberry milk over ice, its a real treat. You'll never be able to convince people of things, they will have to see it for themselves, so just keep on drinking milk-its healthy for you.

GMN

 

[TexasBred]

I love milk....drink it everyday with just about everything. But the best milk is still right out of the tank on the dairy.....38 degrees and full butterfat.....awesome and will definitely give you a brain freeze. :lol: