QUOTE AND NEWS
The Hindu Business Line  Jun 2  Comment 
Dakshina Kannada Cooperative Milk Producers’ Union Ltd is planning to install solar power plant at its dairy in Mangaluru. This will help meet the requirement of the dairy partially. In an informa...
The Economic Times  Jun 2  Comment 
The Gujarat Co-operative Milk Marketing Federation (GCMMF), which sells its products under the 'Amul' brand, has decided to increase prices of its all milk variants by two rupees per litre.
Agrimoney.com  Jun 1  Comment 
Prices at GlobalDairyTrade auction tick upward again. But better-than-expected New Zealand production weighs on whole milk powder values
The Hindu Business Line  Jun 1  Comment 
ABT Industries’ dairy division is initiating a farming concept for the promotion of dairy farms, to get the comparative advantage in milk production. To achieve this, it has adopted an integrated ...
BBC News  Jun 1  Comment 
The British dairy farmer betting on a different kind of milk
The Hindu Business Line  May 31  Comment 
June 1 is observed as ‘World Milk Day’. Rajiv Mitra, Managing Director, Govind Milk, speaks on the importance of the day with respect to Indian milk industry.Why do we have a ‘Milk Day’?It all starte...
The Economic Times  May 31  Comment 
As part of facilitating distribution, the company is looking to set up five milk packing unit, production of high temperature milk is also on the anvil.
The Hindu Business Line  May 31  Comment 
June 1 is observed as ‘World Milk Day’. Rajiv Mitra, MD, Govind Milk, speaks on the importance of the day with respect to the Indian milk industry. Why do we have a ‘Milk Day’? It started about...
Clusterstock  May 31  Comment 
By Ben Hirschler LONDON (Reuters) - Nestle, the world's biggest food company, is stepping up its push into medicine with a global deal worth up to 100 million euros ($111 million) to develop and market an experimental milk allergy test for...
The Hindu Business Line  May 27  Comment 
Barbecued jackfruit, cashew-based gouda, coconut milk yogurt, wheatgrass shots, black bean brownies and pristine water right out of a birch tree. The NYC Vegetarian Food Festival 2016 was bursting with new ideas and interesting eats




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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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