Drought in Midwest raises milk prices
Updated On: Oct 12 2012 09:45:13 PM EDT
Next time you head to the grocery store, a gallon of milk could cost you more.
U.S. milk production is headed for the largest contraction in 12 years, and the drought in the Midwest is to blame.
Matt Lussier at Lussier Dairy in Hawthorne says the drought has sent the price of the corn he feeds his cows to a record high, so he's supplemented that with grass. The cows are still healthy, but they produce less milk.
When supply goes down and demand is still high, prices goes up. It's something many shoppers are not looking forward to.
Talena Goad said $3.69 was more than she expected to pay when she went to pick up a gallon of milk Friday.
"I buy a lot of milk, at least two gallons of milk a week, and every little bit helps," she said. "I'm not working. I come down here and I haven't got a job yet, so it's only my husband, and these prices are outrageous."
And they are expected to go up even more.
"Because of the drought, farmers have taken soy and core bean away from cattle," Lussier said. "We've greatly reduced it here because you can't afford to buy it. So when you take them away from that, they produce a lot less milk."
But demand for milk is still the same.
When the Lussier Dairy peaked in March before the drought, cows there produced about 40,000 pounds of milk a day. Now it's about 18,000 pounds a day, a more-than-50-percent drop.
That's a difference of about 2,200 gallons of milk and a $100,000 loss for Lussier.
He and other farmers are now waiting for the U.S. Department of Agriculture to raise the price they get paid for milk to balance the costs. It's slowly risen in the last few months, a trend that's expected to continue.
"If they don't charge more for milk, there won't be any milk," Lussier said. "It's going to come down to that."
That will trickle from the farm to the dairy aisle.
Goad says she'll just have to get ready.
"You really have to just bite the bullet," she said. "There's no choice. You've got to have milk in your life."
The USDA will set the price for milk again in about two weeks. The last raise was about $1, which translates to about 10 cents a gallon on the farm level.
The milk has to go from a processor to the grocery store, so the actual increase could vary.
Prices for a gallon of milk at grocery stores in Jacksonville are as follows:
- Winn Dixie $3.65
- Publix $3.69
- Walmart $3.73
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