QUOTE AND NEWS
guardian.co.uk  11 hrs ago  Comment 
Supermarkets know consumers are sensitive to price rises of staple items such as milk. So they have increased the cost of less regular items in the hope that people won’t notice If your weekly shopping bills seem to be going up, even though the...
Forbes  Apr 11  Comment 
Plant-based milks are surging, while traditional dairy products are struggling to keep pace. Find out why...
Insurance Journal  Apr 10  Comment 
Country Fresh LLC, a milk manufacturer in Livonia, Mich., will pay $84,750 to settle a sex discrimination lawsuit filed by the U.S. Equal Employment Oppor­tunity Commission (EEOC), the federal agency announced. The EEOC’s lawsuit alleged that...
Financial Times  Apr 10  Comment 
Hindustan Unilever and Gujarat milk co-op in cold war over vegetable oil smear
The Hindu Business Line  Apr 7  Comment 
Looking to break even this fiscal with a turnover of over ₹200 cr
Agrimoney.com  Apr 6  Comment 
Rabobank forecasts milk prices to stabilise, as the fall-off in milk production eases, while trade tensions with Mexico threaten US dairy industry
Forbes  Apr 6  Comment 
The Dairy Pride Act is aiming to remove "milk" from the packaging of plant-based milk with the support of figureheads like the American Farm Bureau. Milk sales have declined 11% YoY, while institutions like the Harvard School of Public Policy are...
Agrimoney.com  Apr 4  Comment 
The premium of whole milk powder to skim opens up to near record levels, after New Zealand prices give back all their premium to competing origins
DailyFinance  Apr 4  Comment 
Filed under: Lifestyle, Food, Recipes Welcome to Best Bites, a twice-weekly video series that aims to satisfy your never-ending craving for food content through quick, beautiful videos for the at-home foodie. Check back on Tuesdays and...
Forbes  Apr 2  Comment 
Huishan has "lost contact" with key financial exec




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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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