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What the heck happened to the price of milk?

Mr. B and I headed out for a little grocery shopping last night. We needed to pick up some milk and were absolutely stunned by the price. I guess I haven't paid much attention to how much they're charging lately, but we just paid $2.80 for a half gallon!

That's $5.60 a gallon, or twice the price of gasoline! And for a domestic product...

What the heck happened?

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  1. More ethanol productiom = higher maize prices = higher milk prices

    1 Reply
    1. re: Sam Fujisaka

      In our area the corn shortage is only part of the reason - a lot of local dairies went out of business last year and sold their cows for slaughter. We're lucky to get home delivery of local milk (hormone free). We pay $6.00 a gallon for that. It's beautiful milk - I'd pay a lot more if I had to!

    2. Well...first, I'd love to find gas for $2.80 these days...in SF its more like $3.60. Second, buying a half gallon at a time will increase the price per gallon...so that's some small part of it. Was it organic? If so, that's a pretty good price actually.

      Current national average for a gallon of milk is right about $3.50. Its going to go up, though. A lot. There have been some drought conditions in much of the US. Also, prices were fairly low last year so large dairies slowed production to drive prices up and we're seeing some of the effects of that. International sales of milk have also increased a lot, which adds to demand, which drives up prices as well.

      One last note: we have very low prices for many products compared with pretty much everywhere else in the world. Some of those prices are starting to correct and go up. Lots of reasons for milk prices, is the short version.

      2 Replies
      1. re: ccbweb

        Right, more than $4.00/gallon here in Colombia.

        1. re: ccbweb

          No, not organic...regular old milk.

          I guess we're lucky with the gas prices here in Dallas.

          I was just curious as to the reasons, thanks.

        2. The 2% milk in N-E Ohio is now over $3.00 (usually between 3.20-3.50) a gallon. Farmers that I know are seeing a slight increase in their income, but its still doesn't reflect the complete price increase. There is going to be a significant increase in the price of baked goods(bread and such) come September and October and they expect the price of meat to almost double because the the feed prices. The winter wheat crop looks good but but Ethanol is taking a lot of corn that would usually go into animal feed or processed foods.

          We are in a slight drought and if we don't get water soon, the corn, potatoes and soybean crop will definitely be affected.

          I have already locked in the price of my beef 1/2 that I am going to purchase in October. The local hog farm expects the price of pork to go up 25%-50% but it may well go higher.

            1. My kids drink nearly a gallon of organic milk a day. Yesterday Horizon was $7 a gallon and Borden Organic wa $6. It might be cheaper for me to buy a cow I think