May 24, 2004

 

 

US Milk Prices Rising With Other Dairy Products
 

The price of a gallon of milk is rising in the Northwest, where prices already tend to be higher than the national average.

 

According to a government survey, consumers in Seattle, where milk prices frequently are among the highest in the nation, are now paying about $3.62 for a gallon.

 

Portland was not far behind at $3.36 per gallon, the survey said.

 

Other dairy products are on the rise, too, after farmers endured near record low prices last year.

 

Milk sales have held steady despite the price increases, although sales of cheese and other dairy items have dipped slightly, said Mike Reed, a spokesman for the Winco grocery chain.

 

Dairy industry officials warned that consumers should not blame farmers for rising store prices. Farmers point to the large gap between what they get paid and the retail mark-up in stores.

 

The farmers' share of a gallon of milk is about $1.20 at current prices. For all dairy products, farmers get about 30 cents of every dollar consumers spend.

 

"It's really positive to see prices go up. It will allow us to pay some of these bills we have not paid in the last two years," said Bernie Faber, a Polk County dairy farmer who milks about 300 animals. Stronger milk prices will allow Faber to replace equipment, although milk profits are partially offset by higher feed and fuel costs.

 

Agriculture officials say a number of factors caused the dairy price increases. They include increased farmer control over the milk supply, a ban on importing Canadian heifers because of the mad-cow disease scare, and farmers leaving the dairy business.

 

Last year, the National Milk Producers Federation established a program, called Cooperatives Working Together, which paid dairy farmers to trim milk production and, in some cases, send herds to the slaughterhouse.

 

Farmers voluntarily paid to support the privately funded program designed to boost slumping wholesale prices, which had dropped below the break-even point.

 

The program reduced the nation's milk supply by a fraction of 1 percent, said Chris Galen, spokesman for the milk producers.

 

Many in the dairy industry have called the program a success, and it has been renewed through June 2005.