Strong international demand for US dairy ingredients, coupled with rising corn and soybean prices, has pushed milk prices to a record high, an industry body has claimed.
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The International Dairy Foods Association (IDFA), a US-based association representing the country’s dairy manufacturing and marketing industries, said milk prices had risen over the last six months.
“Strong international demand and short global supply of nonfat dry milk, dry whey and lactose have steadily driven prices up in the past six months,” said IDFA president and CEO Connie Tipton yesterday (10 April).
“The price of nonfat dry milk has gone up about 30%, and the price of dry whey is at a record high. In fact, it’s more than twice as high as it ever was before the current run-up in prices.”
At the same time, the IDFA pointed out that growing demand for corn to produce ethanol is causing feed costs to escalate. Feed is the largest operational cost for dairy farmers. “Ethanol production is diverting some of the available corn formerly used to feed dairy cows, and some farmers are diverting land that had been used to produce other feed crops to grow more corn instead,” Tipton said.
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By GlobalDataThe IDFA said feed costs are not expected to drop in the near term, with prices in the corn futures market indicating that the price of corn will remain relatively high this year. Prices have also risen for soybeans, another feed crop, the IDFA said.
Last year’s lower farm milk prices had resulted in a slowing in the growth of total milk production in the US, the IDFA added. Lower production, coupled with strong demand both within and outside the US, also contributed to the higher prices.
“It’s really encouraging that the US is now a major player in the growing global market for dairy products, but it’s also a mixed blessing for our industry because of substantially higher input costs,” Tipton said.
