QUOTE AND NEWS
Mondo Visione  Jul 21  Comment 
On Wednesday 19 th  July, EEX set a new daily trading record in Dairy Futures with a total of 698 contracts (439 in Skimmed Milk Powder and 259 in Butter) traded.
Financial Times  Jul 21  Comment 
After selling milk business in 2015, growth will need to come from other products
NPR  Jul 20  Comment 
Whole Foods has been forced to stop selling goat cheese made from milk that came from a prison farm, where inmates work for less than a dollar an hour. Yet the inmates themselves aren't complaining.
Agrimoney.com  Jul 20  Comment 
Carr's Group, the animal feed producer with operations in the US and UK, says both farm markets are recovering, with rising milk prices helping
The Economic Times  Jul 20  Comment 
Most dairies had increased milk prices during the lean period of the summer season, taking ‘full fat’ milk to Rs 52/litre and double toned milk to Rs 38/litre.
USDA NASS  Jul 20  Comment 
The Economic Times  Jul 18  Comment 
The plant, to be installed on a turnkey basis by GEA, will process around 90,000 litres per hour of milk to produce multiple value-added products.
Agrimoney.com  Jul 17  Comment 
Dairy farm prices in the top milk exporting country extend their revival against an upwards, if slowing, trend in milk prices
Agrimoney.com  Jul 17  Comment 
The upwards trend in milk prices, although slowing, is giving New Zealand producers the confidence to invest in their businesses, including farmland.
The Economic Times  Jul 17  Comment 
Known for breads, cakes, candied almonds to flavoured milk ­ the brand is intrinsic to Bengaluru's shopping history . It is Bengaluru's oldest and the first self-service supermarket chain.
Financial Times  Jul 14  Comment 
Producers become rebels with a cause to stop rivals ‘hijacking deserved good image of milk’




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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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