Last week I attended a second meeting of the 33rd Grafton Conference, on the Vermont dairy industry. The first meeting was in March (see this post). The Windham Foundation will now publish a report from the conference. I will post a link here when it is available.
Much has happened since the March meeting. The Vermont Milk Commission has been active (more info here). Commodity prices peaked at the end of June and have since fallen dramatically. Milk prices are much lower than was expected last spring. The Chinese milk scandal (milk tainted with melamine) broke in July, significantly reducing demand for milk products in China. The Saputo cheese plant in Hinesburg was damaged by fire in September, and the company announced in October that it was closing the plant.
Outside of agriculture, the subprime financial crisis worsened significantly in September, prompting major government interventions in the financial markets. Earlier this month it was announced that we have been in a recession for a year. And the Obama administration and a new Congress take office next month, which will affect public policy of all kinds.
All of these topics were discussed. I was asked to speak on two topics:
The financial stress we are seeing on farms: We are hearing from farmers that there is considerable stress. It has not yet shown up in our statistics, but they always lag stress on the farm.
The effects of the financial crisis on the availability of credit for agriculture: As discussed in other posts on this blog, the Farm Credit System is still able to obtain funds, but at increased cost. Yankee's variable interest rates to members are presently 0.75% higher relative to prime than last summer.
UPDATE 1/23/09: The financial stress on farms has increased in the weeks since the Grafton Conference, as milk prices continue to decline and the general economy contracts. And while Yankee's variable interest rates to members are still 0.75% higher relative to prime than last summer, they are now the lowest in Yankee's history. Both topics are discussed in this post.
UPDATE 7/20/09: Click here for the conference report (1 MB PDF file).
