New York Times  Nov 12  Comment 
Christopher Pouy founded Cow Wow Cereal Milk to bring a taste of his past to today’s children. But the milk is proving more popular with an older set.
The Globe and Mail  Nov 12  Comment 
The Trans-Pacific Partnership trade talks appear to be making progress and could soon put pressure on Canada to make concessions of its own
The Hindu Business Line  Nov 11  Comment 
Veterans foresee challenge of keeping youth interested in continuing white revolution
Wall Street Journal  Nov 11  Comment 
Dean Foods reported a smaller-than-expected quarterly loss and said price increases and cost cutting would help it churn out a profit in the current period.
TheStreet.com  Nov 10  Comment 
NEW YORK (TheStreet) -- "The natural and organic trend is alive and well," TheStreet's Jack Mohr said following a slew of earnings results from some of the top players in the industry.  Most recently, WhiteWave Foods , the maker of natural...
NPR  Nov 10  Comment 
Access to breast-milk banks is a problem in the developing world. A smartphone accessory could save lives by allowing health workers to set up mini milk banks anywhere.
Wall Street Journal  Nov 10  Comment 
Dean Foods reported a smaller-than-expected quarterly loss and said price increases and cost cutting would help it churn out a profit in the current period.
The Hindu Business Line  Nov 9  Comment 
The National Dairy Plan (NDP) of the Central Government has achieved about 62 per cent of its desired target of funding projects that would increase the productivity of milch animals and milk prod...
The Hindu Business Line  Nov 7  Comment 
Punjab is going great guns in trying to grow its army of dairy professionals. This month the government will undertake 125 special training camps in all districts. Participants will learn artifici...
guardian.co.uk  Nov 6  Comment 
Sale of milk business to Müller Wiseman could provide healthier competition in the UK dairy industry, analysts say Dairy Crest has pulled out of milk, selling its loss-making dairy business to German rival Müller for £80m, which leaves the UKs...


"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.


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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.


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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