Equitymaster  Jun 4  Comment 
Posted by Equitymaster        PARAG MILK FOODS LTD share price has plunged 6% and is presently trading at Rs 331. Meanwhile, the BSE 500 Index is at 14,771 (Down 0.5%). Among the top losers in the BSE 500 Index...
The Economic Times  Jun 1  Comment 
Annual increase in milk production is 6.3 per cent during 2014-18 period while annual increase in milk production during the period 2010-14 was 4 per cent, said Singh.
Yahoo  May 27  Comment 
Becker Milk is one of the ten dividend stocks that can help raise your investment income by paying sizeable dividends. These stocks are a safe bet to increase your portfolioRead More...
The Economic Times  May 25  Comment 
The S&P/ASX 200 index slipped 0.1 per cent or 4.3 points to 6,032.8 at the close of trade.
The Hindu Business Line  May 24  Comment 
Government procurement and exports to SAARC nations a possible solution
USDA NASS  May 24  Comment 
April Milk Production up 0.7 Percent. Milk production in the 23 major States during April totaled 17.3 billion pounds, up 0.7 percent from April 2017...
Wall Street Journal  Apr 24  Comment 
An upstart milk company’s success in marketing a controversial type of milk that is supposed to be easy to digest has some big dairy companies setting aside their skepticism to introduce their own versions.
USDA NASS  Apr 20  Comment 
March Milk Production up 1.5 Percent. Milk production in the 23 major States during March totaled 17.8 billion pounds, up 1.5 percent from March 2017...
The Hindu Business Line  Apr 19  Comment 
The ₹2,000-crore Parag Milk Foods has acquired Danone’s manufacturing facility in Haryana for ₹30 crore. The acquisition is expected to help the domes
The Hindu Business Line  Apr 19  Comment 
The Hindu Business Line  Apr 19  Comment 
Given its predominance in Indian cattle there is no need for consumers to switch to the branded version of A2 milk


"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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