Dairy Exports Closely Correlate with Milk Price

October 24, 2011 09:51 AM

The chart below shows a clear correlation between net dairy export value (export value minus import value) and the Pennsylvania all-milk price, reports James Dunn, an economist with the Pennsylvania University. The charts uses of 12-month moving averages evens out the wiggles.

“The message is unambiguous. More net exports and a higher milk price go together,” says Dunn. “When net exports began to fall in late 2008, milk price fell with them. When they began to rise, milk price do too.”
export chart 10 24 11
The chart also shows net exports flattening for the last month report. “The lower milk prices for upcoming months are consistent with net exports falling in late 2012, which presumably they will, although the data has not been reported yet,” says Dunn.

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