The Hancock-Henderson Quill, Inc.
Stock markets and milk prices aren’t the only things crashing. I have actually drawn a blank as what to write about this week. But with a little stimulus package (Oreo cookies) and careful observation of the supply/demand curves (fitting in to a new dress for convention) I have discovered the real reason for my mind freeze. Tax Season!
Many people’s eyes glaze over at the mere mention of sitting in the tax preparers office reviewing the numbers and waiting to exhale at the conclusion. Did we spend enough? Did we spend too much? My tax bill is what? My mom and her sister do farm and estate taxes in Illinois. She reminds us that paying taxes is a good thing, just don’t pay too much.
I have all of my papers and figures ready to go to our meeting this week. We have checked and doubled checked to make sure everything is accounted for. With the computer, I can quickly compare previous year’s income and expenses. I was surprised to see that 2007 and 2008 gross milk sales were within a couple hundred dollars of each other. I don’t think we will have the same problem with 2009 milk sales. That is one way to lower the tax bill for next year.
Jonathon brought the January milk statement in from the barn. He noticed the February milk future prices and couldn’t believe it. We couldn’t either. Coming home from church we were talking about the lower milk prices. The kids thought it was just supply and demand affecting the price. Mark and I shook our heads and said “no”.
Now I have a theory that a white haired man with a handle bar mustache is hiding behind a curtain spinning knobs, pulling levers and blowing steam to confuse us about the complexity of figuring milk prices. It really shouldn’t be that hard, but there are so many variables to factor into the equation that it becomes the Wizard of Oz. I think only 3 people in the whole country know how to figure milk prices.
Every morning at 6 o’clock, the farmers in my hometown congregate at the Café for breakfast and stimulating conversation. (Their wives are great cooks, but the morning conversations are limited to grunts until they have at least 5 cups of coffee.) The topic of discussion this week was the milk price.
We have only one dairy farmer in the whole county and he doesn’t make it in for breakfast. So to have crop, beef and hog farmers discussing the dairy industry is very enlightening. They had heard reports of falling milk prices, but couldn’t get a handle on the impact of the drop. Bill told them he knew who to call and would report back on Monday.
I put together our 2008 milk prices for Bill and told him that they probably weren’t done sliding. He chuckled. It’s not much different from cattle pricing. The theory is that you make money in 3 out of 10 years. Save during the boom to get through the bust.
He’s right. We have had some very good milk prices in the last two years. Many debts were paid off and investments were made for future generations. I know forecasted milk prices are ridiculously low for this next quarter, but it is like a bouncing ball. What comes down, must go up!
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As their 4 children pursue dairy careers off the farm, Natalie and Mark are starting a new adventure of milking registered Holsteins just because they like good cows on their Minnesota farm. (Natalie grew up in Stronghurst, the daughter of Becky and the late Larry Dowell.)
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