Will Pols Milk the Rise in Milk Prices?


The Cincinnati Enquirer reports on the increase in milk prices:

Fuel costs, plus higher prices for feed corn and silage, are pushing dairy farmers' production costs up. With more corn being used to make ethanol, the increased demand is pushing up feed prices….

The average U.S. retail price of whole milk could rise to $3.35 a gallon by October, up from $3.07 in January, said Ken Bailey, an agricultural economist at Penn State University who specializes in the dairy industry.

A U.S. Department of Agriculture forecast also predicts an increase in the price that processors pay to farmers for raw milk—an indicator that the retail price of milk also will rise.

When the average price of milk rose 19 percent in the spring of 2004, milk purchases fell less than 4 percent, said Stephanie Smith, a spokeswoman with the National Dairy Council.

More here.

Not that they need any more issues to latch on to, but would it be surprising if pols tried to milk milk prices the same way they do gas prices?

Let's hope they do–as it might just help start a discussion about the various ways in which governments at the federal and state level add some $1.5 billion a year to what consumers pay for dairy products through regulation, including price floors. Some history on that here and here.

NEXT: The Gun Ban and the Gunman

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. How will that affect the price of my beloved Venti Mocha at Starbucks? I already pay $4.14 for that in Arlington, VA ($3.99 in Cnetheville, VA, the home-town of that VA Tech shooter and Jayson Blair).

  2. ACK! Cnetheville should be Centreville (I think).

  3. The sad truth is that farmers are still being paid virtually nothing for thier milk.

  4. The sad truth is that farmers are still being paid virtually nothing for thier milk.

    The bright ones get paid a lot for the milk from their cows. Extra government checks, government restricted competition, the whole thing.

  5. Are milk producers going to be called Big Teat?

  6. They could just blame the milk price increase on rising fuel costs.

  7. How can the poor afford milk at these rates! Why aren’t there any programs to help them out?

  8. What confuses me about dairy policy is that we have both subsidies and price floors. Now, I’m against both, but I’ve always been curious about whether the free market price for milk would actually be higher or lower.

    Yeah, yeah, I support free market pricing of milk regardless, I’m just curious. And, because the effects of the policy aren’t entirely clear, I’m skeptical when somebody comes in and assures us that dairy policy raises the price paid by families. The price floors certainly do, all else being equal, but the subsidies would have the opposite effect, all else being equal. Put it all together, with nothing equal, and it’s not clear what will happen.

  9. governments at the federal and state level add some $1.5 billion a year to what consumers pay for dairy products through regulation, including price floors.

    Well you know, farmers need those supports. If consumers can’t afford milk, they just need some sort of welfare, like foodstamps or something. The point is, that wealth is created by the government writing checks.

  10. Cnetheville is the hometown of Cthulhu, I think.

    Yeah, I don’t understand the alarmist cries over the price of certain goods, milk and gasoline being two good examples. The only price that really matters to most people is the percentage of your income, and by that measure it seems to me that both of these items are as cheap as ever.

  11. How will that affect the price of my beloved Venti Mocha at Starbucks? I already pay $4.14

    You get what you deserve, Guy.

  12. Thoreau,

    The free market price is indeed lower. There was a farmer here in AZ who was able to exploit a loophole in the government dairy regulations about distributing milk. Basically, because he owned his cows, land, processing plant, and distribution company, he could sell milk for any price he wanted. He was selling for a lower cost than the producers who use the distribution co-ops.

    I know nothing about this website, but the article sounds exactly like the one I first read in the Arizona Republic.


  13. Bah! Gov’t. writing checks has never CREATED new wealth.

    Anyway…. It’ll be fun to watch how this ethanol thing shakes out. For years the USDA and others have falsely claimed that corn-based ethanol didn’t affect the food supply. The few of us paying attention to the issue 2 years ago knew that was crap. And now it’s starting to happen. Will people be so big on trying to end our our foreign dependence on oil (which ethanol doesn’t do) in exchange for foreign dependence on food and water (some of the bigger corn producing counties in the country are doing things such as draining the Oglala resevoir)?

  14. Next thing you know, we’ll be pushing to become a milk powered nation. Prius hell, get in line to order your luxurious calf drawn ox cart.

Please to post comments

Comments are closed.