The Hindu Business Line  2 hrs ago  Comment 
 Milk and milk products' brand, Amul has been ranked top in the consumer confidence as reported by Brand Trust Report for the year 2015. The home-grown food brand ranked first in the "Fo...
The Australian  Feb 26  Comment 
MURRAY Goulburn will maintain a $6 a kilogram milk solids farmgate price over the remainder of the year despite a big fall in dairy commodity prices.
Agrimoney.com  Feb 26  Comment 
The co-operative holds at an eight-year low its forecast milk price paid to farmers, amid doubts over the sustainability of a recovery in world values
guardian.co.uk  Feb 24  Comment 
Rising consumer spending on organic dairy provides good news for struggling farmers, with one in four shoppers now buying organic milk As he looks out over the Irish Sea from his Welsh dairy farm, Hayden Evans is feeling optimistic. Rising sales...
USDA NASS  Feb 23  Comment 
USDA NASS Michigan : 02-23-2015: January Milk Production Agriculture Report
Forbes  Feb 22  Comment 
When I became a mom for the first time I didn't know anybody who was working and nursing. I had to bring a pump to work and pump milk a couple of times a day. I had twins in my first pregnancy, so I was full of milk. If I didn't pump milk in the...
Wall Street Journal  Feb 20  Comment 
The private-equity owners of Milk Specialties, a maker of protein ingredients used in nutritional supplements and animal products, are exploring a sale of the company.
Wall Street Journal  Feb 20  Comment 
Farmers in China have been dumping milk and culling cows as a dairy boom has swung to a bust. The impact has been felt far beyond China, illustrating the outsize role the nation plays in commodity markets.
USDA NASS  Feb 20  Comment 
The Economist  Feb 19  Comment 
CHINESE mothers are feeding their infants more milk-based formula. Aspiring Russians have grown addicted to decadent foreign cheeses. In most emerging markets the consumption of dairy products is growing. So it looks like the perfect time for one...
The Times of India  Feb 19  Comment 
Private dairy Parag Milk Foods is aggressively expanding its market in the Northern region with the company on Thursday announcing its entry into the UP’s ghee market.


"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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