Milk souring as record profit spurs expansion of herds
Record dairy profits and milder weather are leading to a surge in milk supplies from Auckland to California, turning last year's best-performing commodity contract into one of the worst of 2012, Bloomberg reports.
Output in the US will advance 1.8% to a record 90.6 million tonnes in 2012, the Department of Agriculture estimates.
Futures traded on the Chicago Mercantile Exchange already fell 29% from a four-year high in August and may drop another 7.8% to $14.25 per 100 pounds by July, the median of six analyst estimates compiled by Bloomberg shows.
An estimated 30% jump in US dairy exports led to the most profitable year ever for farmers, who expanded herds that now are the biggest since May 2009, USDA data show. Yields reached a record during an unusually mild winter.
Supply is also rising in Australia and New Zealand, the largest exporter, and dairy was the only food cost tracked by the United Nations to decline last month.
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