QUOTE AND NEWS
TechCrunch  Jan 27  Comment 
 For all the innovation that has come out of startups, few have addressed one of the hardest tasks in the world: caring for a newborn infant. Whether it is providing milk at 3 a.m. or ensuring that the baby is exposed to the right shapes and...
The Hindu Business Line  Jan 26  Comment 
Party will milk the event for Assembly poll campaigns
guardian.co.uk  Jan 24  Comment 
End of EU quota system could lead to desperate farmers adding to the milk glut and hundreds opting to leave the industry British dairy farmers are being told to expect further falls in milk prices, prompting concerns that hundreds more may soon...
USDA NASS  Jan 23  Comment 
USDA NASS Michigan : 01-23-2015: December Milk Production Agriculture Report
Agrimoney.com  Jan 23  Comment 
The National Milk Producers Federation highlights the dent to values from a reversal of last year's "tight" market conditions
Red Orbit  Jan 23  Comment 
Christopher Pilny for redOrbit.com - Your Universe Online Aside from writing, editing, publishing, and correcting the many errors we miss throughout the week, one of the main tasks in keeping redOrbit running (and any news media for that...
New York Times  Jan 23  Comment 
The directors Chris Milk and Spike Jonze, in partnership with Vice News, have created an eight-minute virtual-reality experience that catapults audiences into the center of the Millions March protest in New York in December.
USDA NASS  Jan 22  Comment 
December Milk Production up 3.2 Percent. Milk production in the 23 major States during December totaled 16.2 billion pounds, up 3.2 percent from December...
Agrimoney.com  Jan 22  Comment 
New Zealand's dairy farm market put in a weak finish to 2014 amid weakening milk price prospects, and with dryness fears growing too
The Hindu Business Line  Jan 21  Comment 
Parag Milk Foods is investing ₹75 crore in creating a new brand identity, entering new segments and expanding capacity this year. Funded by private equity players such as Motilal Oswal and IDFC, t...




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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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