April 12, 2007

US milk prices reach record highs in 2007

International demand for US dairy ingredients and rising corn and soybean prices has caused milk prices to reach record highs, according to the International Dairy Foods Association (IDFA).

Strong demand and short global supply of nonfat dry milk, dry whey and lactose have driven prices up in the past six months, said IDFA president and CEO, Connie Tipton.

The price of nonfat dry milk has gone up about 30 percent, and the price of dry whey is at a record high, she remarked.

On the production side, growing demand for corn to produce ethanol is causing feed costs to escalate. The association also expects feed costs and corn market prices to remain high for the remainder of the year.

The IDFA also said that lower farm milk prices in 2006 resulted in a slowing of the growth of total milk production.

Lower production, coupled with the present strong demand both in the US and abroad, has contributed to the higher prices.

Although it is encouraging to see the US as a major player in the growing global market for dairy products, it is also a mixed blessing as production costs have risen, Tipton said.