Milk is flowing like never before in the U.S., where dairies have expanded output enough to send wholesale prices plunging from an all-time high in September.
Production in the 12 months through October reached 17.08 billion pounds a month on average, up 1.8 percent from the same period a year earlier, as farmers took advantage of high milk prices and low livestock-feed costs, government data show. At the same time, global supplies are expanding with increased output from top producer New Zealand and the European Union, sending U.S. dairy exports in September to a 19-month low.
The supply boom, fueled by the best profit margins in more than a decade, rebuilt stockpiles eroded by a surge in exports in the first half of 2014. Wholesale-milk futures are down 37 percent from a record 11 weeks ago, reducing costs for buyers including Dean Foods Inc. (DF) and Lifeway Foods Inc. Consumers also got a break, with average retail prices for whole milk, butter and cheese dropping in November from a month earlier.
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