Milk prices: 'Collapse quite likely'

Falling milk prices are "near certain and a collapse quite likely, given global inventories," as dairy products have piled up in warehouses unsold, analysts Jonathan P. Feeney and Mark E. Williams write today in a report to clients of their Berwyn-based firm, Athlos Research.

Indicators such as the GlobalDairyTrade price index, down 30% since June, and USDA milk demand, off 2% in August, the first drop since early 2013, are "screaming, 'lower prices,'" the Athlos report added.

That may be good news and lower expenses for dairy buyers and milk processors and resellers such as Dean Foods, the Dallas conglomerate that supplies Lehigh Valley (based in Lansdale), Tuscan (Roebling, Burlington County), Swiss Premium (Wengert's Dairy, Lebanon, Pa.), and other milk brands, the Athlos report noted. Feeney and Williams predict that a continued "industry decline" will eventually be followed by "capacity reductions" that will mean higher profits for the remaining dairy producers.