JP Morgan Trims Estimates On Dean Foods

JP Morgan has published a research report on Dean Foods Company

after hosting a conference call with Phil Plourd, current president of the dairy consultancy Blimling and Associates to discuss 2011 outlooks. In the report, JP Morgan writes "Dairy product prices continue to move higher, primarily driven by a spike in butter prices and higher nonfat dry milk (NDM) prices. Since Dec 1, butter prices spiked up >35% and NDM prices increased 12%, according to Blimling. The peak for butter is expected to be reached in Feb; however, prices are forecast to remain over $2.00 until May. Powder prices have more room to run and are forecast to increase an additional 14% until reaching a peak in Mar. U.S. Class I milk prices are expected to peak at $19.21/cwt in Apr (+13%). A tight global supply and increased international demand are the key drivers of the further inflation expectations." JP Morgan maintains its Neutral rating and $10 price target. Dean Foods Company closed yesterday at $9.70.