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What the heck happened to the price of milk?

QueenB Jul 15, 2007 06:45 AM

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?

  1. Sam Fujisaka Jul 15, 2007 06:47 AM

    More ethanol productiom = higher maize prices = higher milk prices

    1 Reply
    1. re: Sam Fujisaka
      lupaglupa Jul 16, 2007 10:16 AM

      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. ccbweb Jul 15, 2007 07:26 AM

      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
        Sam Fujisaka Jul 15, 2007 08:09 AM

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

        1. re: ccbweb
          QueenB Jul 15, 2007 11:44 AM

          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. k
          Kelli2006 Jul 15, 2007 08:47 AM

          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. Chris VR Jul 15, 2007 08:53 AM

            Here's an interesting article on this subject: http://www.boston.com/business/articl...

            1. p
              pickychicky1979 Jul 15, 2007 09:59 AM

              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

              1. rcallner Jul 15, 2007 10:03 AM

                I just listened to a story on the radio this week about the price of milk. Here's the link: http://www.npr.org/templates/story/st... Sam Fujisaka got it right, but this is a longer version.

                1. Karl S Jul 15, 2007 12:36 PM

                  That's going to happen with all dairy products and derivatives: butter, cheese, pizza...all courtesy of corn. Just wait for soda prices to shift. Or for things to be "re-sized"...

                  And what people don't get is how obscenely *cheap* our corn has been for years courtesy of farm bills.

                  5 Replies
                  1. re: Karl S
                    m
                    masha Jul 16, 2007 10:10 AM

                    Soda prices have shifted upwards, at least in the Chicago area. In fact, so has virtually all food, whether corn is an ingredient or not, as energy costs of transporting food to market is going up. Produce is definitely more expensive than a year ago.

                    1. re: Karl S
                      Woodside Al Jul 16, 2007 10:24 AM

                      Could this portend a move back to more cane sugar usage, like in sodas? After all, a large part of the reason for the big shift to HFCS was the wide availability and cheapness of corn.

                      1. re: Woodside Al
                        m
                        MakingSense Jul 16, 2007 11:09 AM

                        Likely not. Ethanol can be made from cane 3x as efficiently as from corn so cane producers are gearing up to get their piece of the pie. It's already being used in Brazil.
                        The conversion to switchgrass for ethanol production or a move away from ethanol would make a difference.

                        1. re: Woodside Al
                          m
                          masha Jul 16, 2007 02:02 PM

                          I buy diet soda, so the HFCs is not what is driving the price. I'm guessing that it is just the fact that soda is relatively bulky & heavy, so transportation (and packaging) are a significant component of the pricing, both of which are affected by energy prices. My suspicion is that bottled water prices are going up for the same reason.

                          1. re: masha
                            Karl S Jul 16, 2007 03:18 PM

                            Well, realize that corn is a component of plastics that can be used for beverage bottles and containers....

                      2. vvvindaloo Jul 16, 2007 03:34 PM

                        FYI: I pay at least $4.00 per half gallon of organic milk here in Manhattan, sometimes $5, depending on where I shop. This price is easily $1-2 more than I was paying for the same product just three years ago. I have been watching this trend with horror, but I seem to recall that it was predicted several years ago.

                        3 Replies
                        1. re: vvvindaloo
                          k
                          KevinB Jul 17, 2007 02:19 AM

                          Sometimes I'm glad I live in Canada! Milk is $2.99-$3.29 Cdn for four litres (about 5% more than a US gallon). However, that's for four one-litre bags; if you try to buy a 2-litre carton, that's usually $2.59, and a 1-litre is $1.69. Makes it tough if you live alone.

                          As for bottled water - this week, I bought a package of 30 500ml bottles for $2.55 Cdn.

                          And I bought (and froze) 4 lbs of butter for $1.99 each last week. That should last me until Christmas!

                          Maybe you should start arranging trips up here to get your dairy products along with cheap prescription drugs... :}

                          1. re: KevinB
                            javaandjazz Jul 17, 2007 02:36 PM

                            I paid $3.22 a gallon for skim milk from Guida's Dairy here in south western CT last night and that's the cheapest around here that I have seen.

                            1. re: KevinB
                              thenurse Jul 26, 2007 12:33 PM

                              I would beg to differ a bit on your prices - $2.99 - $3.29 is the absolute cheapest on sale price for milk, at least in Toronto/Southern Ontario - tough to find (Reid's Dairy? - certainly not Loblaws or Dominion). And, that isn't organic.

                              The cheapest milk I find in Toronto is at Shopper's Drug Mart - $3.99/4litres. I pay $8.29/4litres of organic milk.

                          2. GeekVanessa Jul 17, 2007 03:34 PM

                            The price on corn will eventually plummet as it always does. Until then expect to pay more for anything that incorporates it. Actually I heard from a farmer that it isn't even a matter of having to pay more... it is actually difficult for them to find feed for corn. Here I pay $3.25 for a half gallon of organic milk delivered to my home. $14 for a 1/2 G of heavy cream (I'm going to make butter).

                            1 Reply
                            1. re: GeekVanessa
                              m
                              MarkG Jul 21, 2007 04:33 PM

                              fuel prices and heavy milk demand for mozzerella cheese (pizza!! ) the only good news: the people of mainland china are NOT milk drinkers. or exporting would send the domestic price to ten bucks a gallon!!

                            2. b
                              bulavinaka Jul 21, 2007 07:43 PM

                              Milk products in Malaysia are reported to be going up as well. I was just there and the subject came up with my father-in-law. He says the government announced the impending price increase over a week ago. I think it was going to be a 20-30% increase which is going to hit alot of young families. I don't recall the reasons but I believe the milk powder used to feed toddlers comes from Australia.

                              1 Reply
                              1. re: bulavinaka
                                m
                                MakingSense Jul 21, 2007 08:04 PM

                                Also one of the reasons for the increase in the price of organic milk products in the US. Australia exports organic powdered milk to the US. US producers can't keep up with the demand for organic milk products so they augment with Australian.

                              2. widehomehi Jul 21, 2007 08:14 PM

                                I know it's a shame.I wonder if they don't got us so used to getting ripped off by the gallon with gas they just thought they'd do it with milk.

                                1. Cat Chow Jul 26, 2007 12:11 PM

                                  Here in California we had some bad weather related situations (the terrible heat wave that hit California, but especially in the valley) that that impacted the state's dairy farms...we lost a lot of cows! And not just the cows, but a lot of the crops grown there...most of us knew this was coming.

                                  1. s
                                    swsidejim Jul 26, 2007 12:40 PM

                                    Increased use of corn to make biodiesel fuels, and ethanol based fuels has increased the use/price of corn that is used as feed for cows. Expect the price for anything that corn is used in, and any product it is used as feed to go up.

                                    It is what it is

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