Agrimoney.com  Oct 2  Comment 
A New Zealand milk production drop, which has been a big factor in reviving dairy prices, is to prove even bigger than thought, BNZ says
The Hindu Business Line  Oct 1  Comment 
The IPO space is heating up as two firms, Parag Milk Foods and Maini Precision Products, today filed draft papers to fund business expansion.Both have filed draft documents with the markets...
The Hindu Business Line  Oct 1  Comment 
Given the price fall in copra and coconut oil, the Coconut Development Board has asked Farmer Producer Organisations (FPO) to focus more on value addition to ensure a steady income. FPO’s...
newratings.com  Sep 28  Comment 
WASHINGTON (dpa-AFX) - Truco Enterprises is recalling select packages of "On The Border Café Style Tortilla Chips" due to the possible presence of a milk-containing ingredient. People who have an allergy or severe sensitivity to milk run the risk...
The Hindu Business Line  Sep 25  Comment 
‘MooShake’, a dairy health beverage manufactured by Odisha-based Milk Mantra, is set to hit stores in Hyderabad this month and in Mumbai and Chennai by end-2015. The milkshake, introduce...
Agrimoney.com  Sep 24  Comment 
Farmers in New Zealand, the top exporter, are to reduce milk output far more than expected, says Fonterra. Still, the market will stay "difficult"
The Economic Times  Sep 24  Comment 
The New Zealand dollar rose on Thursday on a relief rally after giant dairy cooperative Fonterra lifted its milk payout forecast, dragging the Aussie a touch higher.
NPR  Sep 23  Comment 
The typical American family tosses out some $1,500 of food yearly. From smarter fridge packing to sauteing soggy lettuce, a new book is full of tips to rescue edibles from landing in the trash.
New York Times  Sep 23  Comment 
A new report on dietary fat consumption suggests that the public is increasingly consuming more, not less, of foods high in saturated fat like butter, meat and whole milk.
The Hindu Business Line  Sep 21  Comment 
Shares of Prabhat Dairy, an integrated milk and dairy products company, made a sluggish debut on bourses today, falling nearly 2 per cent over the issue price of Rs 115. The stock got lis...


"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.


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.


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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