Jerry Dryer, chief economist with Rice Dairy says dairy has been the best-performing commodity this year. Milk futures averaged $18.60 a hundredweight this year, up 41 percent from a year ago outperforming even gold.
Dryer tells Bloomberg export demand is the driving force with emerging dairy markets in Mexico, China and the Philippines. The Chinese melamine scandal didn’t hurt either as American milk enjoys an excellent reputation. Memories of that scandal popped up again this week when some Chinese dairy products were recalled because of high aflatoxin levels.
High cattle prices have also contributed to the mix as dairy producers are quick to send underperforming cows to slaughter and keep the U.S. dairy herd in check.
While dairy futures for 2012 are currently averaging about $17.17, down $1.40 from the 2011 average, as with any commodity, things can change quickly.


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