U.S. milk prices soar to highest level in years
April 5, 2004
Reuters reports that milk prices have reached the highest level in years. The cause, according to Reuters, is high demand and less production. A number of events have occurred to cut milk production and lift prices. Mad cow disease in Canada in May 2003 halted imports of Canadian dairy cattle, record high beef prices in the United States last year had producers sending more dairy cows to slaughter and rising feed grain prices have producers feeding less, which reduces milk production. At the Chicago Mercantile Exchange last Friday, milk for April delivery was very close to $20 per 100 pounds, the highest since 1996. Also helping guide milk futures higher, according to Reuters, has been Monsanto Co. reducing by 50 percent its allocations to producers of Posilac, a supplement that increases a cow''s milk production, economists said.The company said changes at a manufacturing plant prompted the action, and the cutback may last through 2004. The U.S. Agriculture Department reported milk production, on a per day basis, was down about 2 percent in February from the previous year and was down about 1 percent in January. The drop in production has occurred, while demand is strong, particularly for cheese, which appears to be benefiting from the popularity of high-protein diets.