$3.35 For A Gallon Of Milk? Dairy Prices Set To Rise Throughout Summer
US - Dairy economists predict the retail price of milk could rise as much as 30 cents per gallon — a 9 percent jump — by fall. The reasons include rising fuel and feed costs for farmers and increasing demand for milk products around the globe.
30 March 2007
1 minute read
A U.S. Department of Agriculture forecast also predicts an increase in the price that processors pay to farmers for raw milk. That is typically an indicator that the retail price of milk also will rise.
Yet seesawing milk prices seem to have little effect on the buying habits of consumers.
When the average price of milk rose 19 percent in the spring of 2004, milk purchases declined less than 4 percent, said Stephanie Smith, a Denver-based nutritionist and spokeswoman with the National Dairy Council.
Habit and nutritional concerns appear to loom large, Smith said. USDA nutritional guidelines, for instance, recommend that most Americans drink 3 cups of skim or low-fat milk a day, or the equivalent amount of cheese.
The price of milk swings by classic supply-and-demand economics, said Douglas Eberly, counsel for the Pennsylvania Milk Marketing Board. When prices dip, it makes it harder and more expensive for farmers to make milk.
If demand remains constant, but the supply of milk goes down, prices tend to increase. That may allow farmers to ramp up milk production again, which increases supply and in turn likely lowers the retail cost of milk.
Source: The Columbus Despatch
