August 19, 2004

 

 

US Milk Prices Rise To The Top

 

From January to April, the U.S. average for a gallon of milk was $3. In May, the average began to creep up towards the $4 mark. On Friday, several Montgomery grocers in Alabama were selling a gallon of name-brand milk for $4.49.

 

But Regan Miller Jones of Atlanta-based Southeast United Dairy Industry Association Inc. said there is light at the end of the tunnel.

 

"The USDA indicates the prices (of milk) will decrease," Jones said. "We've had a really depressed milk supply in the summer months. There were much fewer cows, so there was less milk. And there are other factors affecting the increase, but farm prices are on their way down, so retail prices should be heading down."

 

Jones said people do not understand that the retail price is not directly tied to what the farmers receive. Dairy farmers get about 30 cents on the dollar. Anything above that can fluctuate, depending on costs associated with packaging and marketing.

 

The rising costs of gasoline and feed did not help matters, she said.

 

Jim Smotherman, president of the Birmingham-based Alabama Grocers Association, agreed.

 

"A lot of things have affected the prices on a lot of commodities," he said. "Gasoline has played a big part. But the government regulations had reduced the number of hours the drivers can drive. And since 9/11, the industries have spent a lot of money beefing up security, particularly in the meat and dairy industries. These two (industries) are very vulnerable to pollutants."

 

And all these factors add up, thereby pushing up the retail costs, he said.

 

"When it comes to bio-terrorism protection, I don't mind paying a little extra to make sure what I'm getting is safe," he said.

 

Nevertheless some consumers are thinking twice before grabbing that gallon of milk or pound of beef steaks or package of chicken breasts.