July 1, 2004

 

 

Milk Prices To Drop 24 Cents A Gallon In US State

 

The price of milk on the grocery store shelf will drop 24 cents a gallon Thursday. The price decrease, approved a few weeks ago by the US Pennsylvania Milk Marketing Board, somewhat offsets a steep price increase that began in May.

 

In May, the price of a gallon of milk jumped 19 percent, from $2.88 to $3.43, according to information from the Milk Marketing Board.

 

The price went up again in June, rising to $3.50 a gallon, but the price will drop to $3.26 a gallon Thursday.

 

Most dairy farmers in the area have probably been getting about $20 for each hundredweight of milk, said Denise Wetzel, who with her husband, Tim, operates a dairy farm near Mount Pleasant Mills.

 

That payment is expected to drop to about $17 per hundredweight, she said. There is about 12 gallons of milk in a hundredweight, and a cow will produce about seven gallons a day, she said.

 

That means that a farmer with 50 dairy cows will be getting about $88 less each day.

 

While dairy farmers are obviously not happy that they will be getting less money, they still are much better off than they were two years ago, Wetzel said.

 

"At $17, it's still a very good price. When you start getting down to $14-$15, that's when it gets tight," she said.

 

At the worst, the price per hundredweight was running $11 to $12, she said.

 

The May milk price jumps were largely caused by the Mad Cow restrictions on the importation of cattle from Canada. Because Canada is the main source of replacement cows for dairy farms, farmers were left without a place to get new cows.

 

Dairy farms replace 2 percent of their herds a month. Thus without access to replacements, the number of cows available to produce milk has been dropping, making the milk supply decrease as well.

 

The low price of milk drove many farmers to get rid of their cows, which further reduced milk production, according to information from the Milk Marketing Board.

 

And the increase in the cost of milk seemed to prompt some shoppers to turn to other beverages to quench their thirst, said Dennis Curtin, spokesman for Weis Markets.

 

"When prices increased significantly, that resulted in a slight erosion in milk sales," he said.

 

It appears that shoppers picked up the slack by buying more water, flavored water, juice and soda, he said.

 

The spate of price fluctuations may be coming to an end.

 

"It seems to be getting back to normal," said Tracey Jackson, a spokeswoman with the Pennsylvania Milk Marketing Board.