QUOTE AND NEWS
New York Times  Jul 29  Comment 
Mr. Milk, a San Francisco supervisor whose life and death have been the subject of books, movies and an opera, served in the Navy from 1951 to 1955.
Wall Street Journal  Jul 28  Comment 
A lawyer for Libya’s sovereign-wealth fund cited an internal email during closing arguments from a Goldman banker warning colleagues not to sell complicated trades to the fund because officials weren’t prepared to handle the investments.
MedPage Today  Jul 28  Comment 
(MedPage Today) -- Health news and commentary from around the Web, gathered by the MedPage Today staff
The Economic Times  Jul 28  Comment 
The leadership change at the agency that oversees the Rs 2,250 crore National Dairy Plan to increase milk production in the country is happening at a crucial time.
The Economic Times  Jul 28  Comment 
The plummeted global prices of SMP have affected their exports from India, leading to crash in their prices in the domestic market.
Clusterstock  Jul 27  Comment 
A former Goldman Sachs partner warned the bank to resist the pressure to "milk" Libya's $60 billion (£42 billion) sovereign wealth fund in an email in 2008. The email was cited in court by the Libyan Investment Authority's lawyer, Roger...
Agrimoney.com  Jul 22  Comment 
...but significant price recovery is unlikely this year, as heavy skimmed milk powder stocks continue to cap price rallies, US officials warn
The Hindu Business Line  Jul 22  Comment 
Frenzied fans poured thousands of litres of milk on huge cut outs of megastar Rajinikanth and sang and danced outside theatres at 4 a.m. as hype and hoopla marked the release of his latest film “Kabal...
USDA NASS  Jul 21  Comment 
June Milk Production up 1.6 Percent. Milk production in the 23 major States during June totaled 16.7 billion pounds, up 1.6 percent from June 2015. May...
The Economic Times  Jul 21  Comment 
Behind some of the success is India’s growing protein needs -- Bhat estimates India’s animal feed market will probably double to a $30 billion industry in the next five years.




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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

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