Wednesday, February 19, 2014

Moo Money! Cost of a gallon of milk going up 50 to 60 cents in March

Good Day World!

When I heard that the price of milk was going up this year I assumed it mostly had to do with California’s drought.

It wasn’t a crazy assumption, however. California leads the nation in milk production. But the following article gives another reason why we can expect a gallon of milk to cost more by March:

“Dairy analysts estimate store milk prices could go up 60 cents in March, reaching their highest ever.

"The cupboards are dry," said dairy economist Mary Ledman.

Blame cheese. Short supply pushed cheese to a new peak in January, going from $1.80 to $2.36 a block. That jump is driving the March increases for "fluid milk."

Moreover, in early 2013, farmers responded to higher feed costs by cutting back on herd growth. Coupled with growing international appetite, especially from China, that's led to tighter supplies and higher prices.

But not every fridge will feel the pinch. Some stores may choose to eat the 30-cent increase in farm level milk prices occurring from January to March. In other areas, families could see their milk bills going up 50 to 60 cents a gallon.

The average price for milk was $3.50 in December, according to the most recently available data from the Bureau of Labor Statistics.

Brian West, a spokesman for the Publix supermarket chain based in the Southeast, said the store expects milk prices to rise in the next few months.

Supplies will shoot up soon after the new batch of calves are born and cows reach peak milk production 60 days later. After that, milk prices should begin to taper, falling 20 percent through December, said dairy analyst Jerry Dryer.

The current California drought, however, is the bad news. Without relief, production of alalfa, a key feed for cows, could be curbed, pushing up milk prices even higher in late 2014 and early 2015, said Ledman.

Dry fields now, dry cereal bowls later. (via NBC News)

Time for me to walk on down the road…

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