$4 Milk

While the price of gasoline is stabilizing for the moment, milk seems headed for $4 a gallon.  And it's not just stateside where the price is rising.  Among the factors cited by the Times of London:

The continuing drought in Australia, which has crippled the country’s dairy output, has raised the wholesale price of skimmed milk powder by 60 per cent in six months. Over the past year, the cost of skimmed milk powder, used widely by the food processing industry, has soared from $2,000 per tonne to $4,800 per tonne…

Changing diets and rising living standards in Asia, notably in China and the Middle East, have caught international milk processors on the back foot. Greater wealth is leading to a change in the Asian diet, explained Carmen Suarez, chief economist at the National Farmers Union. “There is population growth and higher incomes, which leads to higher consumption of animal protein.”

And while we're on the subject of liquids in increasingly short supply, check out this free DR White Paper from Chris Mayer on the growing supply-demand imbalance when it comes to water.

The Daily Reckoning