QUOTE AND NEWS
New York Times  4 hrs ago  Comment 
Substitute almond or coconut milk for yogurt or buttermilk for some dairy-free, delicious smoothies.
Mondo Visione  Oct 1  Comment 
Two online tools designed to provide better insights into New Zealand milk production and farmgate milk prices have been launched by NZX Agri. The tools, a Milk Production Predictor and a Farmgate Milk Price Calculator, have been developed by...
The Australian  Sep 30  Comment 
THE chief executive of Goodman Fielder, Chris Delaney, says lower milk prices should offer a lift to the business ahead of its likely takeover.
The Hindu Business Line  Sep 26  Comment 
Increased activity in milch rearing in Kerala in the recent past is likely to benefit the dairy industry and help improve milk production. From a very small holding of two to three c...
Financial Times  Sep 25  Comment 
Falling dairy prices not reflected in NZ$ value, RBNZ governor says
The Hindu Business Line  Sep 24  Comment 
Gujarat Cooperative Milk Marketing Federation (GCMMF), which sells Amul brand of milk products ranked 15th among the top dairy organisations in the world in the International Farm Comparison...
Financial Times  Sep 24  Comment 
World’s biggest dairy supplier has cut amount it will pay farmers for milk after fall in global prices that could hit New Zealand’s surging economy
Wall Street Journal  Sep 24  Comment 
The Australian  Sep 24  Comment 
USDA NASS  Sep 22  Comment 
USDA NASS Michigan : 09-22-2014: August Milk Production Agriculture Report
USDA NASS  Sep 19  Comment 
August Milk Production up 2.6 Percent. Milk production in the 23 major States during August totaled 16.2 billion pounds, up 2.6 percent from August 2013...




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"Milk" redirects here. For the actual futures contract on the CME please see milk futures.

In the US, dairy has a farm value of production that makes it second only to beef [1]. Despite increasing efficiency of production, domestic dairy demand has remained so high that US dairy farmers have found little incentive to export abroad. Significant export activity is limited to powdered milk and cheese to Mexico. But as seen in Chart 1, the US imports large quantities of dairy products, especially relatively expensive cheese products from the European Union.

See Beef Prices for more on US beef production and consumption, and the Dairy Products page for more on this industry.

The chart at left shows continuos front-month futures prices for Milk traded on the Chicago Mercantile Exchange.

Overview

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Chart 1. Image from the USDA.
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Chart 2. Data from the USDA.

Dairy prices are historically relatively stable. However, even small fluctuations in price can have a big effect on related companies. The USDA projects that a slight increase in the number of milk-producing cows and increasing milk production efficiency will result in a continued drop in domestic dairy prices.

The USDA forecasted the 2007 all milk price 10 cents higher than the earlier $19.05 prediction to $19.15. In 2008, the all milk price forecast is increased from $18.00 to $18.80. The minimum price of raw milk is regulated in most parts of the country by the government at $9.90, but ever since Cooperatives Working Together (CWT), a dairy farmers group, put into place initiatives in 2002 to control milk supply by retiring herds, milk price have shot up and have remained around $14.

[1]


Who wins from lower domestic dairy prices?


Who loses from lower domestic dairy prices?

  • Hain Celestial Group (HAIN) is a major producer of soy products, often seen as competing with dairy products for demand and consumption. Lower dairy prices may worsen the price difference and discourage commercial consumers from turning to slightly pricier soy alternatives.
  • AspenBio Pharma (OTC:APNB) and other companies that derive significant profit from manufacturing dairy-related bovine hormones may feel the strain of lower dairy prices through the purchasing capacity and demand of bovine farmers for more yield-increasing drugs.

The New Export Market

A growing export market may counteract the effect of domestic dairy price drops. Chinese dairy consumption is growing at an annual 15%, and many other developing countries weigh in at about 10%--comparing such numbers to the US's annual domestic consumption growth of a paltry 0.4% has led many to believe that China could be the US's next big dairy surplus export market.

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