QUOTE AND NEWS
CANOE.ca  Aug 13  Comment 
These Wheaties may not be so good with milk.
The Economist  Aug 13  Comment 
LITTLE over a year ago, New Zealanders were still talking about a “white-gold rush”. Strong prices for milk were prompting sheep and cattle farmers to convert to dairy, and Chinese firms were coming in to buy up agricultural land and milk...
guardian.co.uk  Aug 13  Comment 
Consumers are being urged to boycott supermarkets and buy milk direct from farmers, to ensure producers receive a fair price. Find one near you with this handy interactive map More than half a century after their heyday, local milk producers are...
guardian.co.uk  Aug 12  Comment 
Farmers don’t get paid enough but some shoppers can’t afford to buy. How did the market get so out of kilter? It is never all about money. It is, for example, becoming a familiar observation to say that housing, at least in London and a...
The Hindu Business Line  Aug 12  Comment 
  Veteran cooperative leader and Sabar Dairy chief Jethabhai Patel was, on Wednesday, unanimously elected as Chairman of the prestigious Gujarat Cooperative Milk...
The Hindu Business Line  Aug 11  Comment 
Key milk co-operatives, unions, producer companies and National Dairy Development Board on Tuesday met with the Food Safety and Standards Authority of India (FSSAI)’s new chief Ashish Bahuguna to...
guardian.co.uk  Aug 11  Comment 
Supermarket chiefs meet NFU and other leading unions in bid to resolve protests and blockades over falling milk price Morrisons is to launch a new milk brand that costs 10p extra, with the premium paid directly to British dairy farmers, in an...
guardian.co.uk  Aug 11  Comment 
Forbes  Aug 11  Comment 
Liu Qiangdong, the 40-year-old billionaire chairman of China’s No. 2 e-commerce business JD.com reportedly married social media star Zhang Zetian, better known as “sister milk tea,” in Beijing over the weekend.
newratings.com  Aug 10  Comment 
WASHINGTON (dpa-AFX) - Dairy company Dean Foods Co. (DF) reported Monday a profit for the second quarter compared to a loss last year, despite a sales drop on lower volumes, reflecting improved margins amid low raw milk prices. Adjusted earnings...
guardian.co.uk  Aug 10  Comment 
Four farming unions to discuss growing crisis at London meeting as protests across the UK escalate Four farming unions are due to meet for an emergency summit amid a “crisis” over milk prices. There have been protests across the UK as...




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS


"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.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki