QUOTE AND NEWS
Insurance Journal  Mar 24  Comment 
A small, all-natural dairy isn’t being deceptive when it calls its skim milk “skim milk,” a federal appeals court has ruled – a victory for a Florida creamery that fought the state’s demand to label the product “imitation” because...
The Economic Times  Mar 23  Comment 
Early this month, Mother Dairy and Amul had raised milk price by up to Rs 3 per litre in NCR-Delhi region and other cities, citing significant rise in procurement price.
Agrimoney.com  Mar 22  Comment 
The group flags causes such as rising import demand for, some, optimism on prices - despite raising its forecast for New Zealand milk output
newratings.com  Mar 21  Comment 
WASHINGTON (dpa-AFX) - U.S. Federal appeal court has ruled that Skim milk can not be termed as "imitation milk product." The verdict is against Florida's state law that defines food items of nutritionally inferior to the original product as...
USDA NASS  Mar 20  Comment 
February Milk Production down 1.0 Percent. Milk production in the 23 major States during February totaled 15.7 billion pounds, down 1.0 percent from...
The Hindu Business Line  Mar 16  Comment 
As the board exam fever runs high, giving stressful days and nights to the students, India's largest milk brand Amul has come up with a ready-to-drink milk product from ancient ayurvedic recipe that i...
DailyFinance  Mar 15  Comment 
Filed under: News, Recall, Science & Tech An outbreak of the foodborne disease listeria has been spreading throughout the Northeast, and it's prompting a large recall of soft raw milk cheeses commonly found at Whole Foods and elsewhere. Read...
MedPage Today  Mar 15  Comment 
(MedPage Today) -- Health news and commentary from around the Web, gathered by the MedPage Today staff
BBC News  Mar 14  Comment 
The prices of soya milk and adults' jigsaws are now also used to calculate the cost of living.




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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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