Michigan Dairy Review
home about events links archives contact


2008 Dairy Survey

virtual dairy cattle encyclopedia of reproduction

CornPicker for Silage Hybrids

spartan nutrient cycle card

World Dairy Markets and the US Farm Milk Price

Christopher Wolf
Dept. of Agricultural, Food and Resource Economics

We live in a world that is increasingly globally interdependent. This has been especially true in the dairy market for US producers in recent years. For many decades the US, along with the European Union (EU), interfered with farm milk price. The resulting surplus production was exported with subsidies. In the past couple of decades both the US and EU have retreated from those policies which resulted in a great deal more price volatility as national and international markets determined milk price.

The growth in US dairy exports began in earnest in 2004 (Figure 1). For many years, the total amount of dairy product exported was less than 5% of production on a total solids basis. In 2004, about 7.5% of total dairy solids were exported at a total value of $1.36 billion. Growth was fairly steady for 2005 through the middle of 2008 with 11% of total dairy solids exported in 2008. The total value of US dairy exports was $3.5 billion in 2008.

milk price
Figure 1. Value of US dairy exports, January 2000-October 2009
milk price2
Figure 2. International Cheddar Cheese Price (Oceania), Jan 2005-Dec 2009.

The global economic crisis that began in the fall of 2008 shrank the demand for dairy products world-wide. Demand for US exports, with the exception of dry whey, fell off sharply. The result was that both the quantity and price of exports collapsed (Figure 1).

World prices for dairy products dropped by 50% or more between late summer and the end of 2008. Figure 2 displays the international cheddar cheese price which is representative of the decline in milk price.

The recovery in the international cheese price that began in September 2009 has been lending support to domestic cheese prices. If the export markets can recover, the US farm price will follow suit.




Curent MDR articles

Rabies Disease
Though rare, this disease is very important.

Bovine Leukosis
Virus Update

This update builds on earlier one on BLV.

M anagement
A demonstration project examines storm water runoff filter strip.

Proper Disposal of Dead Animals
An expose´ of the Bodies of Dead Animals Act.

Scholarship Awards
Over $90,000 awarded to dairy students.

Outreach & Education at KBS
Past, present & future opportunities at KBS.

Update on AgJOBS
Latest on Agjob opportunities.

Cow Management Report (DHI-403)
Summary of 2009 Dairy Herd Information report.

Genetic Base Changes
January 2010 update on U.S. genetic evaluations.

Fat Mobilization, Transition Cows
Linking increases in blood lipid with metabolic diseases.

In Life's Harder Times
Offering survival tips in the current harsh economic climate.

What's Happening
Events of the season.

Great Lakes Conference
Info on the 8th Annual Great Lakes Regional Dairy Conference.

Milk Market
Trends in world dairy markets and the U.S. farm milk price.