How to Invest in Milk
Milk is a consumer staple that is often thought of as a household item rather than a commodity investment. Nevertheless, milk can be a lucrative commodity as it offers a play on consumption trends as well as the state of the overall agricultural world. Interest in milk as an investable asset is not nearly as significant as desire for other agricultural commodities, though investors seeking exposure to have multiple options available to them.
Ways to Invest in Milk
There are 2 ways to invest in Milk: Futures and Stocks. Click on the tabs below to learn more about each alternative.
What are Milk Futures?
There is not significant interest from investors in exposure to milk, but those that do wish to bet on prices can utilize futures contracts to do so. There are actually a wealth of futures and options to play milk including class III and IV milk, international skimmed milk powder, and even non-fat dry milk futures and options. There are also a number of other dairy futures offered on the CME. There are also a number of other dairy-based futures offered on the same exchange that will grant indirect exposure to milk prices.
How to Buy Milk Stocks
For some commodities, such as crude oil, it’s possible to gain indirect exposure through an investment in companies that are engaged in production or extraction. This is challenging in the case of this particular commodity because there are few publicly traded companies engaged exclusively in the production and distribution of milk.
There are, however, some options available. The largest in terms of market cap is Groupe DANONE (DA), which is based in France. Other options include Dean Foods Co. (DF), Wimm-Bill-Dann Foods(WBD), and Synutra International Inc. (SYUT). These stocks will seldom move in lock step with milk prices, but may be an interesting option for certain investors.