QUOTE AND NEWS
Insurance Journal  3 hrs ago  Comment 
A judge in Minnesota’s Cass County has awarded $6.3 million to a couple whose milk cows were injured or killed by stray voltage on their dairy farm from a Brainerd utility company. KTTC-TV reports the judge awarded the damages to … The...
WA Business News  Oct 27  Comment 
Forrest eyes big dairy plays Mining billionaire Andrew Forrest has emerged as the potential new owner of WA’s biggest single milk producer as he weighs up more investment in farming and food processing. The West
USDA NASS  Oct 27  Comment 
USDA NASS Michigan : 10-21-2014: September Milk Production Agriculture Report
The Hindu Business Line  Oct 27  Comment 
The recent announcement by the Tamil Nadu Government to increase milk procurement prices has come at a time when prices of milk and milk products are crashing in other markets, including i...
The Hindu Business Line  Oct 26  Comment 
The Tamil Nadu Government’s decision to hike retail price of milk has attracted widespread political criticism by the opposition. The DMK, DMDK and the MDMK have opposed the move...
MedPage Today  Oct 25  Comment 
(MedPage Today) -- This weeks topics include persistent banned substances in supplements, knowledge of central venous catheters among physicians, vitamin D levels and different types of milk, and MD- versus hospital-owned practices and costs.
The Hindu Business Line  Oct 25  Comment 
The Tamil Nadu Government has hiked procurement and sale price of Aavin milk by the dairy cooperative.According to an official press release, the price of a litre of toned milk available thr...
The Hindu Business Line  Oct 25  Comment 
New York Times  Oct 23  Comment 
The 92nd Street Y is marking the centennial of Dylan Thomas’s birth with an exhibition and a revival of his 1953 radio play “Under Milk Wood” this weekend.
New York Times  Oct 23  Comment 
Children who drink rice, almond or soy milk instead of cow’s milk may have insufficient levels of vitamin D.




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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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