QUOTE AND NEWS
The Economic Times  Jul 16  Comment 
Coca-Cola has a partnership agreement with coffee exporter Tristao Companhia de Comercio Exterior, which will acquire and roast the beans.
The Hindu Business Line  Jul 15  Comment 
After Amul hiked milk prices in June, now Mother Dairy has decided to hike milk prices in the Delhi-NCR region effective Saturday. However, the company said it is not hiking prices of its branded l...
Financial Times  Jul 15  Comment 
As tastes change companies are trying to tap into lasting growth areas and not just fads
The Hindu Business Line  Jul 13  Comment 
Dairy start up Freshmen’s Valley launches operations from western UP
The Hindu Business Line  Jul 12  Comment 
Havmor Ice Cream, the Ahmedabad-based leading pure milk ice-cream brand, on Tuesday announced its association with U Mumba, the Mumbai city kabbadi franchise of the Star Sports Pro Kabaddi Leagu...
The Economic Times  Jul 12  Comment 
“NE India is a potential market for us and we will be sourcing our milk requirements locally to connect the farmers to the market,“ said RS Sodhi, MD, GCMMF.
Mondo Visione  Jul 10  Comment 
NZX celebrated a milestone in the development of its NZ milk price futures contract on Friday, with more than one million kilograms of milk solids (kg/ms) traded since the product launched at the end of May. The total number of contracts...
The Economic Times  Jul 9  Comment 
A breast milk bank is a service much like the blood bank. It collects, screens, processes and provides human milk donated by nursing mothers to infants.
Agrimoney.com  Jul 8  Comment 
The European Commission sees a reply of 2009, as a dairy price recovery takes time to filter through to farmers incomes
The Hindu Business Line  Jul 8  Comment 
Infibeam to create special app for Amul




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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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