true protein is the bomb.
anyway yeahright, whey is a food, a staple of society. vcrs are antiquated objects. milk is a renewable food. it is not the same kind of market as electronics. if you looked at a line graph that had the price of milk diplayed over the past fifty years you would see what i mean. the price of it will never ever go down. sure maybe small little incrimental decreases but over time it is going up.
No, whey protein is a waste product that only recently was converted into a food item. Until very recently, it was simply discarded or used as fertilizer.
Yes, milk prices have increased over fifty years but that's only looking at absolute values. Those are meaningless. To gauge any real meaning from those numbers they have to be normalized using a purchasing power formula. In short, how long did an average person have to work to earn $1 and how much product did that dollar buy the person (50 years ago vs. now). When you do those calculations, you get a measure of the "real" price of milk.
Commodity prices fluctuate but not by that much. Milk is kept artificially high through farm price support programs designed to shield farmers from sharp market fluctuations. Consumers are protected from price fluctuations going too high because it's realtively easy to ramp-up dairy production.....which farmers do when there is the opportunity for increased profit. The influx of higher volume then depresses prices.
Like I said, looking at the fundamentals (price increases of farm inputs) it looks like we should be seeing a 10% increase. However, commodity speculators have been buying up futures contracts which will lock-in articially high prices over the short-term. There's no reason to see price increases greater than 25% from the data I've reviewed. I think that we're in the middle of a little panic that looks something like this:
Droughts in New Zealand caused a small contraction of supply.
Increased consumption in some regions further contracted supply.
Fuel and feed prices caused North American farmers to decrease production thus contracting supply.
Commodities speculators saw these events and began to buy up futures contracts, locking in high prices outwards into the future.
Whey Protein Powder producers got caught by surprise (because they didn't have their own futures contracts in place or had expiring ones) and thus are watching the price of their main input go up suddenly.
The reason not to panic is that most of these items will be adjusted over time. Feed producers will increase production to take advantage of higher prices. This will lower the price of the feed. Dairy producers will increase production to take advantage of higher prices. This will lower the price of their product. The speculators will move on to the next commodity experiencing a supply crunch. Droughts and consumption patterns fluctuate.
These are all normal things that happen in the marketplace. It's not like there is some disease wiping out dairy herds. Something like that would be a hard adjustment to the fundamentals. All the things in play right now are soft adjustments which the markets will compensate for.
