30 May 2007

1 minute read

North America

It's milking time: Adam Monhaut prepares dairy cows for milking at Kelsay Farms in Whiteland. Owner Joe Kelsay says fertilizer, fuel and feed costs have risen in recent years as milk prices have stayed stable. But, with growing demand, milk costs are rising.

Dairy farmers have not kept pace with a 3 percent increase in annual milk consumption, according to Rabobank Groep in the Netherlands, the world's biggest agricultural lender.

Chinese consumers, who drink an average of 1.3 ounces of milk a day, will increase demand by as much as 15 percent annually for the next three years, said Mark Voorbergen, a dairy analyst at Rabobank.

"We're expecting to see the highest growth in dairy consumption in China because the Chinese government has started sponsoring school milk programs," said Rabobank's Voorbergen.

The world consumes about 1.9 billion liters of milk a day, enough to fill five supertankers, based on estimates by Rabobank. The 14 percent jump in milk demand during the past seven years outpaced the 13 percent rise in oil use, according to estimates from the International Energy Agency in Paris.

Source: The Indianapolis Star