*Sauve qui peut -- French: "Save who can," a disorderly retreat.
A very fancy corporate consulting firm announced recently that Merced would lead the way out of recession in the north San Joaquin Valley because of UC Merced. As intrepid Modesto Bee business reporter J.N. Sbranti noted, the fancy new economic model unveiled by the consultants from outer space failed to include the foreclosure rate. This blip failed to live up to the big shot firm’s slogan: “Bringing you the power of perspective.”
There is another problem hovering beyond the dreams of developers, for whom UC Merced is the anchor tenant. Merced is the second largest milk-producing county in the nation. Stanislaus is ranked third. Milk prices have been in drastic decline for six months. The anecdotal figures one hears range from losses of $30,000 to $100,000 per dairy per month, depending on size. There is a report that feed suppliers cut off feed for 60 dairies in recent weeks.
Unlike most of the nation, California -- ranked #1 in milk production, producing about a third of the total national supply -- has its own milk marketing order and sets its own prices. Three components of the California milk-price formula are related to the same indices used by the feds: the prices of block cheddar, bulk butter and non-fat dry milk on the Chicago Mercantile Exchange. The fourth and highest-value component to the price is the fluid milk pool.Read More »