QUOTE AND NEWS
The Economic Times  Dec 8  Comment 
Another industry expert Sanjay Trivedi said that home care industry is growing at the rate of 10-11 per cent till now and personal care is between 18-20 per cent.
Motley Fool  Dec 6  Comment 
The Coca-Cola company's surprising new frontier in its quest to retain its global beverage domination.
Japan Today  Dec 5  Comment 
The Ministry of Agriculture, Forestry and Fisheries has announced a plan to increase household butter production by 30% in preparation for the holiday season. A ministry spokesman told a news conference Thursday that four major domestic dairy...
The Hindu Business Line  Dec 4  Comment 
Tamil Nadu Chief Minister, O Panneerselvam today defended the Tamil Nadu government's move to hike the price of Aavin milk and said that the rate has been fixed lesser than that of private players...
The Australian  Dec 4  Comment 
QANTAS Freight and partner Peloris Global Sourcing have combined to milk a unique opportunity in China.
CNNMoney.com  Dec 3  Comment 
Coke has retired an advertising campaign for Fairlife, its new 'enhanced milk' product, that many deemed overtly sexist.
Agrimoney.com  Dec 2  Comment 
Prices at GlobalDairyTrade auction hit a five-year low, as whole milk powder values take their decline this year to 55%. But is the rout near an end?
The Hindu Business Line  Dec 2  Comment 
After milk, ice-creams and milk products, Hatsun Agro, the country’s largest private dairy company, is diversifying into a range of heat-and-eat dishes under a new brand.Later this w...
Motley Fool  Dec 1  Comment 
But the high-priced premium beverage looks unlikely to turn around Americans' dwindling taste for milk.




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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

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.

[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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