Why are milk prices rising?

November 9th, 2010 by Leave a reply »

The price of milk has risen globally 44% during the past year. There are many reasons why the price has been increasing rapidly. One factor is that there has been a growing desire for dairy foods in China and various other portions of Asia. Also the rising price of the fuel needed to transport the milk from the dairy farms to the distributer has risen drastically. Fast food Chains such as Starbucks and Mcdonald’s are introducing unfamiliar taste buds to cheeseburgers and lattes. This combine with the fact that there have been major droughts in Australia and New Zealand have created a “Perfect Storm” of events that have caused the extreme rise in dairy price world- wide. Keep in mind that New Zealand and Australia are the largest exporters of milk in the world. This is not something that is going to be strictly held to dairy products. Any food items that have milk incorporated into the ingredients will almost certainly have a raise in price. The price of most dairy products have already risen, however even the regular candy bar is expected to see a price hike soon. The increased Global demand for dairy products combined with lack of supply cause the price of the product to rise. When supply meets the demand then the price will level out. The problem is that nobody can accurately predict when that will happen. Experts say that we can probably look for higher prices on dairy products for some time to come.

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