QUOTE AND NEWS
The Hindu Business Line  May 15  Comment 
Competition in the milk market is hotting up in Telangana. Karnataka Milk Federation (KMF) is set to enter the Hyderabad market with its Nandini brand milk and other value-added products....
The Times of India  May 14  Comment 
Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets products under the 'Amul' brand, has achieved a turnover of Rs 20,733 crore in 2014-15 financial year and is now eyeing a Rs 50,000-crore turnover in the next five years.
Agrimoney.com  May 12  Comment 
The US dairy giant, foreseeing increasing world milk output, says prices may face further pressure. CBA highlights a threat from currency markets too
guardian.co.uk  May 12  Comment 
Pair found to have breached food standards code with scheme in which people shared ownership of cow and drank its unpasteurised milk A South Australian farming couple faces a fine after being found to have breached food standards by selling raw...
Agrimoney.com  May 11  Comment 
Shares in the US dairy group soar after it unveils better-than-expected results, as a drop in milk prices boosts processing margins
Wall Street Journal  May 11  Comment 
Dean Foods Co. said resilience in prices for its dairy products drove better-than-expected results in the first quarter and is continuing to buoy its business in the current period, sending its shares up sharply.
The Times of India  May 9  Comment 
The Gujarat Cooperative Milk Marketing Federation (GCMMF), the largest producer of milk which markets brand Amul on Saturday announced the launch of ‘Amul’s India’ book.
Reuters  May 7  Comment 
Australian almond producers are boosting output to meet growing Asian demand for the nut used for making milk and eaten as a healthy snack, hoping to steal market share from dominant U.S. farmers struggling because of protracted drought in...
The Hindu Business Line  May 7  Comment 
Parag Milk, Schreiber await Commerce Ministry’s ‘assurance certificates’
The Hindu Business Line  May 7  Comment 
Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of Amul, will invest up to Rs 5,000 crore to expand its procurement as well as processing and manufacturing facilities over the next tw...




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

Error creating thumbnail
Chart 1. Image from the USDA.
Error creating thumbnail
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