Agrimoney.com  Apr 14  Comment 
Industry officials call time on the slump in milk prices, saying a slowdown in output has created a "relatively balanced" market
The Hindu Business Line  Apr 14  Comment 
To set up a processing plant with a capacity of 8-10 lakh litres of milk per day
USDA AMS  Apr 13  Comment 
USDA Appoints Members to National Fluid Milk Processor Promotion Board
Agrimoney.com  Apr 13  Comment 
Fonterra warns of continuing dry conditions in parts of world's largest milk exporting country, while EU production flatlines
Agrimoney.com  Apr 10  Comment 
A bigger domestic dairy market, and greater processor rivalry, make Australia a better bet for producers - says Victoria's Australian Dairy Farms
NPR  Apr 7  Comment 
We're not talking about just a smidge. Roughly 10 percent of samples tested contained at least 10 percent cow's milk. Doctors say the diluted milk could be dangerous for babies for several reasons.
New York Times  Apr 6  Comment 
A study published in Pediatrics found that more than 10 percent samples of breast milk bought online contained cow’s milk in significant quantities.
The Hindu Business Line  Apr 6  Comment 
Parag Milk Foods has recently made a foray into the production of whey powder, and plans to launch a range of milk beverages in the next few months.Whey, a by-product of the cheese-makin...
Forbes  Apr 6  Comment 
When did some of the hottest companies in the world realize they actually had a business? The answers will surprise you. With countless companies like Airtime, Milk, Twitpic and Fab that haven't quite found their business model before closing...
BBC News  Apr 4  Comment 
Supermarket giant Tesco wins £1.50 compensation from a customer who spilt a bottle of milk in one of its stores.


"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.


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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.


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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