QUOTE AND NEWS
The Hindu Business Line  May 27  Comment 
Barbecued jackfruit, cashew-based gouda, coconut milk yogurt, wheatgrass shots, black bean brownies and pristine water right out of a birch tree. The NYC Vegetarian Food Festival 2016 was bursting with new ideas and interesting eats
The Australian  May 27  Comment 
Australia Dairy Farms says recent consumer milk choices are mitigating the damage from global forces.
The Australian  May 27  Comment 
The Australian  May 26  Comment 
A milk price cut backdated for almost a full year has driven dairy farmers into crippling debt and potential ruin.
Agrimoney.com  May 26  Comment 
Hold the cream! New Zealand's top dairy cooperative paints a gloomy picture for farmgate milk prices in the world's largest exporter
TechCrunch  May 25  Comment 
 The Bay Area fosters a culture of forward thinkers and new ways to solve problems in our world, including in our food system. Ripple Foods is one such startup in Silicon Valley hoping to disrupt the dairy industry with pea protein. The company...
The Australian  May 25  Comment 
Barnaby Joyce has warned the big supermarkets to axe their $1-a-litre home-brand milk.
The Australian  May 25  Comment 
The Wesfarmers CEO says there’s a limit to what Coles can do the help struggling dairy farmers.
The Australian  May 24  Comment 
Struggling dairy farmers will be able to access millions in government loans amid a slump in milk prices.
The Australian  May 24  Comment 
Agrimoney.com  May 24  Comment 
... and farmgate milk values may stay "very low" until 2018, US officials say, flagging the prospect of further "oversupplies" of EU milk
newratings.com  May 24  Comment 
WASHINGTON (dpa-AFX) - Raw milk, raw skim milk and raw cream produced by Organic Pastures Dairy of Fresno County are being recalled due to contamination with the deadly Salmonella bacteria. The recalled products have a USE BY date of JUN 01 2016,...




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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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