August 10, 2016

Why Milk Prices Are So Volatile

 |  By: Anna-Lisa Laca

While it’s not news that milk prices are in the hole, the reasons why milk prices can be so volatile might surprise you.

According to a recent NPR story, the milk market resembles the oil market. How can this be? Just like oil, a very small percentage of the milk produced in the U.S. is marketed as fluid milk. The rest of the milk is processed into a product like yogurt or cheese, which is then sold on both domestic and global markets.

That means milk markets can peak and crash due to the economic and political turmoil happening in other countries. Given the correlation between years of low milk prices and what was happening in the world during those times, they could be on to something.

Click here to read the full story from NPR.