Just for the sake of clarity, though the budget-related shutdown isn’t helping dairy farms, it’s not the lone reason dairy companies have been struggling of late. Mostly they’re the victims of a soon-to-expire (on December 31st) dairy-price stabilization bill.
The primary worry is that Congress will greatly alter the usual terms of the bill in order to come to some sort of budget consensus, leaving the dairy business unable to support itself. The lesser worry is that the shutdown will last through the December 31st deadline, preventing the introduction of any kind of new farm bill in the meantime, which means law from 1949 will be re-instituted by default. Either way, the price of milk for consumers would theoretically skyrocket and end up pricing dairy products right out of the market for these small-cap stocks.
Once the budget impasse is wrapped up though, a new Dairy Stabilization Act should be right around the corner. That’s good news for a small-cap company like dairy farm Lifeway Foods (LWAY), which saw its shares fall nearly 25% over the course of August and September when the budget impasse was shaping up.