The Hindu Business Line  Mar 21  Comment 
The National Dairy Development Board (NDDB) is using information technology to bring transparency in its operations and improve efficiency in milk collection, said an official. The board has
USDA NASS  Mar 20  Comment 
February Milk Production up 1.8 Percent. Milk production in the 23 major States during February totaled 15.9 billion pounds, up 1.8 percent from February...
Forbes  Mar 16  Comment 
Milk prices have dairy farmers committing suicide at an alarming rate. But these farmers have not yet considered that the multi-billion dollar cannabis industry still needs them.
The Hindu Business Line  Mar 15  Comment 
Tamil Nadu Co-operative Milk Producers’ Federation, popularly known, as “Aavin” was actively pursuing diversification of products, Deputy Chief Minister O Panneerselvam said here today. Th
Bulk Transporter  Mar 14  Comment 
Raw milk quality isn’t compromised when tanker trucks sit empty and uncleaned for hours between loads, according to new research conducted at Oregon State University. The findings in a new study published in the Journal of Dairy Science could...
The Hindu Business Line  Mar 13  Comment 
JMFL Parag Milk (Buy) CMP: ₹278.3 Target: ₹330 Parag Milk Foods (Parag) has
The Hindu Business Line  Mar 11  Comment 
We started as farmers and that is what has translated into our success, says Brahmani Nara of Heritage Foods
The Hindu Business Line  Mar 11  Comment 
Milk production in the country increased by 20 per cent from 137.7 million tonnes to 165.4 million tonnes between 2014 and 2017, Minister of Agriculture and Farmers’ Welfare Radha Mohan Singh has
The Hindu Business Line  Mar 11  Comment 
Forage harvesters usage to improve feed for the cattle


"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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