QUOTE AND NEWS
Wall Street Journal  Jul 19  Comment 
Shoppers' zeal for healthier foods and beverages has turned the tables on a small soy-milk supplier and its former parent, America's largest milk processor.
USDA NASS  Jul 18  Comment 
June Milk Production up 2.0 Percent. Milk production in the 23 major States during June totaled 16.2 billion pounds, up 2.0 Percent from June 2013. May...
The Hindu Business Line  Jul 18  Comment 
The Hindu Business Line  Jul 17  Comment 
The technology to transport milk has come a long way since the 1970s — from cans to tankers to trains
Financial Times  Jul 17  Comment 
English Premier League champions milk on-pitch success after Nissan signs a five-year deal to become global sponsor of its worldwide clubs
The Hindu Business Line  Jul 17  Comment 
The price of milk supplied by MILMA in Kerala has been hiked by Rs 3 per litre and would come into effect from July 21, a top official of the Kerala cooperative Milk Marketing Federation, Limited...
DailyFinance  Jul 17  Comment 
OTTAWA, ONTARIO -- (Marketwired) -- 07/17/14 -- Product photos are available at http://bit.ly/1jRz037Chuang's Company Ltd. is recalling Old Village brand White Coffee from the marketplace because it contains milk which is not declared on the...
Forbes  Jul 16  Comment 
Six years ago today, sixteen infants in China’s Gansu Province were diagnosed with kidney stones. All of them had been fed milk powder that was later found to have been adulterated with a toxic industrial compound called melamine. Four months...
Agrimoney.com  Jul 16  Comment 
Prices at GlobalDairyTrade fall at their fastest in four years, led by a tumble in whole milk powder values, as Chinese buying dries up
DailyFinance  Jul 16  Comment 
OTTAWA, ONTARIO -- (Marketwired) -- 07/16/14 -- Product photos are available at http://bit.ly/1qFayQVEurotrade Import - Export Inc. is recalling Podravka brand Luncheon Meat from the marketplace because it contains milk which is not declared on...
Bloomberg  Jul 15  Comment 
New Zealand inflation accelerated less than economists expected and dairy prices slumped, easing pressure on the central bank to continue raising borrowing costs and sending the Kiwi dollar lower.




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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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