QUOTE AND NEWS
NPR  Feb 17  Comment 
Because of unstable milk prices, small-dairy owners are also selling artisanal cheeses to help them stay afloat. The idea is catching on — in Iowa, the number of on-farm cheese-makers has doubled.
Forbes  Feb 16  Comment 
Shares of Dean Foods, the largest American dairy processor, are down more than 7% in early Thursday trading following a fourth quarter earnings report that missed profit expectations and came in light on outlook. The results are due in large part...
Agrimoney.com  Feb 16  Comment 
The New Zealand dairy giant says its milk collections will fall by less than previously thought, despite a drought in part of the country
The Economic Times  Feb 16  Comment 
In case of eggs, the total output is estimated to be 55.11 billion so far this year, of which 29.09 billion eggs was from monsoon season. The year's target is 87.05 billion.
The Economic Times  Feb 16  Comment 
The three-day conference will have 23 technical and commercial sessions wherein the scientists and industry experts will present their research and findings.
The Economic Times  Feb 16  Comment 
The company has reported a consolidated net loss of Rs 38 crore for the December quarter, compared with a profit of Rs 14.50 crore in the year-ago quarter.
Financial Times  Feb 15  Comment 
Dairy group expects squeeze from higher milk prices and ‘volatile’ economic conditions
NPR  Feb 15  Comment 
A nomadic community of camel herders in India has long relied on camel milk as their source of dairy. Now, a big Indian company is getting ready to mass market camel milk as a health food.
BBC News  Feb 15  Comment 
Danone, the world's largest yogurt maker, says it expects a "steep rise" in milk prices this year.
The Economic Times  Feb 15  Comment 
In the Nifty pack, 15 stocks were trading in green, while 36 stocks were in red. The Nifty index was down 58.15 points at 8734.15.




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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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