Sunday, March 15, 2009

Economy: Goods News, Other News

The good news is about potash production near Carlsbad. It came toward the bottom of an economy story in the weekend Wall Street Journal. On March 9, Intrepid Potash, Inc., of Colorado has its two Carlsbad-area mines operating again. The mines are "only" running for 18 hours a day instead of 24. But, hey, they're running. Intrepid had rolling shutdowns at the two mines through February to adjust to inventory accumulation at dealers, "caused by a global drop in demand and an autumn season marked by bad weather," the Wall Street J report said.
The "other" news comes from Clovis, in the form of a dairy story posted Friday (3/13) from the News Journal ( Here is the beginning of the News-Journal story. "With unprocessed milk prices at the lowest many dairy farmers in Roosevelt and Curry counties have ever seen, they are borrowing against the equity in their operations or going out of business. Milk prices are half of what they were a year ago. 'Everybody’s losing their tail,' said Michelle Heavyside, whose family runs Greenfield Park Dairy on Cacahuate Road. 'But you know, you just have to hope and pray for the best.'
"Albin Smith, who owns dairies in Curry and Roosevelt counties, said the prices are lower now than when he came to New Mexico in 1976, and costs are probably three times higher. Dairy farmers are taking out loans against their equity to pay bills, he said."
A dairy industry friend sent us this report a while back. "As you know New Mexico isn't really business friendly particularly the Environment Department, they are constantly changing the rules/regs (without input from the stakeholders) and they don't care if those changes actually protects the environment or not (because they don't use sound science in determining what needs to be done)...and every time they change the rules/regs it cost our producers money and not little money either, usually it's hundreds of thousands of dollars.
"You know agriculture, we can't pass along any of costs we just have to suck it up...and with milk prices dropping and it looks like it will stay low for a long while (we're looking at approximately $11.50/cwt...break even is approximately $16.75-$17.00)...our producers are really taking a hit. Dairy did well the beginning of 2008, but the year before they were operating 9 months in the red.......end of 2008 and most of 2009 looks like it will be that way again.
"We're actually losing dairies, we lost 6 in 2007...because of the business climate here, and if our producers expand they're expanding to Texas...Texas appreciates agriculture. "
Dairy troubles will hit the southeast especially hard. I think Chaves County may be the number one dairy county in the county.

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