Even $24 milk prices have failed to cool export demand for U.S. dairy products so far during 2014.
China continues to be the biggest driver of that demand and is the reason why the most expensive milk in U.S. history didn't kill sales: Because prices that high still looked like a bargain.
Farm milk prices in China are higher. Much higher. According to the Irish website Independent.ie, current farm milk prices in China are among the highest in the world at 0.58 Euros per liter. That works out to $34.80 per hundredweight.
Even so, China's milk production continues to fall further and further behind its demand. And it's happening at the same time the country's upper and middle classes are growing larger and larger.
Their buying power, combined with continued consumer distrust about the safety of domestically made dairy products, translates into a strong preference for U.S. and other imports, even at very premium prices.
A stunning example is the fluid milk imports from Australia that began in May. Their supermarket shelf price: the U.S. equivalent of $33.74 per gallon. Demand is said to be brisk.
Total volume has been small so far, only about 20,000 liters (45,400 pounds), but a spokesman for an Australian exporting company thinks it could be up to 1 million liters per month by the end of the year.
