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DailyFinance  Apr 14  Comment 
MONTREAL, QUEBEC -- (Marketwired) -- 04/14/14 -- Saputo Inc. ("Saputo") (TSX:SAP) completed today the transaction announced on January 17, 2014 and acquired the fluid milk activities of Scotsburn Co-Operative Services Limited based in Atlantic...
Wall Street Journal  Apr 14  Comment 
Anyone looking to strike a deal in Australia's red-hot dairy sector may have to look harder for targets, after a string of acquisitions fueled by Asia's increasing thirst for milk and other products has left few targets on the block.
DailyFinance  Apr 11  Comment 
OTTAWA, ONTARIO -- (Marketwired) -- 04/11/14 -- Product photos are available at: http://bit.ly/OMypk3 Advantage Health Matters Inc. is recalling Organic Traditions brand Dark Chocolate Sacha Inchi Seeds from the marketplace because...
NPR  Apr 10  Comment 
Rwanda is a hot country, and people love dairy products. But the culture discourages public displays of need, including hunger. The women running the lone ice cream shop are trying to change that.
New York Times  Apr 10  Comment 
A large study has found evidence that milk consumption may slow the progression of knee arthritis.
DailyFinance  Apr 10  Comment 
OTTAWA, ONTARIO -- (Marketwired) -- 04/10/14 -- Product photos are available at http://bit.ly/R4FjDc Hung Gay Enterprises Ltd. is recalling Orthodox Coconut Palm brand Coconut Juice (Coconut Milk) from the marketplace because it...
Times Online  Apr 9  Comment 
In the blazing morning sun, the queue winds down the hill from the supermarket for hundreds of yards, snakes around...
Cloud Computing  Apr 8  Comment 
DENVER , April 8, 2014 /PRNewswire/ -- Record-high animal protein and dairy prices, volatile grain and oilseed prices, and steady-to-lower cropland values reflect agricultural markets in transition, according to CoBank's new quarterly economic...




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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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