QUOTE AND NEWS
The Economic Times  Jun 17  Comment 
Thanking Amul for setting up milk processing units in the state, he said it will help farmers become self reliant and give them a life of dignity.
The Hindu Business Line  Jun 16  Comment 
SBI offers loans for, among others, construction of shed, and purchase of milch animals, milking machine, and chaff cutter
247WallSt  Jun 16  Comment 
An recent survey found 7% of all American adults believe chocolate milk comes from brown cows, raising concerns that many Americans lack basic food knowledge.
Forbes  Jun 15  Comment 
"Many Americans are basically agriculturally illiterate. They don’t know where food is grown, how it gets to stores — or even, in the case of chocolate milk, what’s in it."
Insurance Journal  Jun 15  Comment 
San Francisco supervisors approved legislation that requires employers to provide new mothers a clean and private space to pump their milk, adding to the board’s long history of trying to make the city more equitable for workers even if that …
The Hindu Business Line  Jun 15  Comment 
Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets the popular Amul brand of milk and dairy products, has successfully quadrupled the income of its dairy farmer-members in the l...
BBC News  Jun 14  Comment 
European Court of Justice rules names like milk and butter cannot be used to describe soya and tofu.
NPR  Jun 13  Comment 
A businessman will charter some 60 Qatar Airlines flights for the bovines. He aims to jump-start a dairy industry in Qatar, which risks food shortages while its border is closed.
Automotive World  Jun 9  Comment 
With over 38 million tons, Brazil was the third biggest producer of cow’s milk in 2015. To get the milk onto the breakfast tables or to processing facilities while it is still fresh, about 500 trucks of the milk transporter “Vía Lácteos”...
TechCrunch  Jun 9  Comment 
 Milk deliveries may not sound like an industry in need of disruption, but that’s exactly what one startup in India is working to do. Supr Daily — the company in question — graduated the Y Combinator accelerator program this year and now it...




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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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