Milk Lovers Beware: Brace Yourself For A Rebound In Prices.

Coffee lovers might want to switch from latte to espresso pronto.

That’s because the price of milk is currently skyrocketing and will likely continue to do so, experts say. This phenomena is due to an horrific confluence of events that will make milk lovers wince.

The likely move high will come after a huge retreat in prices over the last year. In late May 2022 the price hit an all-time high of just under $26 per hundred pounds, but has subsequently fallen to $13.80 recently, according to data from financial statistics website TradingEconomics.

However, that plunge likely won’t last long, according to a recent edition of The Hackett Money Flow Commodity Report newsletter. The first problem is the lack of cows — and yes dairy cows are essential to milk production.

“The largest cow cull rate in the US in the past reporting month since 1986 sent buyers scurrying,” writes Shawn Hackett, author of the report. The buyers in question were investing in milk futures contracts in anticipation that the reduced size of the dairy herd would reduce milk production globally and send prices far higher once again.

At the same time China is suffering another food crisis. This time the African Swine Flu has resulted in the mass culling of the hog herd. In turn that will likely lead to shortage of meat protein in China.

Hackett now expects China to increase its purchases of milk as a stopgap measure to find protein to feed its vast population.

Put simply, lower supply plus higher demand could easily send prices back to stratospheric levels once again.

The demand coming from China is key and vital for the Chinese Communist Party. A little known fact is the uprising in Tiananmen Square protests in 1989 were not prompted so much by demands for democracy, but rather because the price of food, notably pork, shot higher. Its a constant theme through history that when people can’t afford to feed themselves or their families then they tend to get more than a little agitated and populist uprisings happen.

Examples include the 2011 Arab Spring, and the French Revolution of 1789. The CCP certainly won’t want to suffer a revolution or even an agitated population, especially coming hot on the heels of the extended COVID-zero policy which involved ultra-long periods of lockdown.

Instead, Beijing’s communist functionaries will now likely be scrambling to bolster the food stocks, including the milk supply, as fast as they can.

In the meantime, investors might want to stock up on long-dated milk futures traded on the CME futures exchange with a view to benefiting from an upswing in prices over the coming months. Its worth noting that futures prices can move with lightning speed and prices trends can switch in a trice. In other words, futures trading is risky even when compared to stock trading.

Separately, it may be worth stocking up on some cases of long-life milk. Depending on how you you buy, you can think of it as a dietary hedge that will allow you to drink milky hot chocolate and lattes for months to come.