Tracy Press

The price for a gallon of milk — and your favorite cheesecake, yogurt and Frappuccino — is on the rise.

Reduced-fat milk hit a record high of $3.10 per-gallon this month, though you'll be hard pressed to find it that cheap. That's just the minimum retail price set by the state's Department of Food and Agriculture.

Prices for a gallon of milk have jumped as high as $4.69 at some local stores, up more than a dollar over years past.

And the base price for a pound of cheddar cheese, a benchmark for other cheeses, is also up sharply, to $2.08 from $1.17 a year ago, according to the Chicago Mercantile Exchange.

Local dairy farmers say the price hikes aren't their fault. And they're not getting rich, several said, even though milk prices have climbed seven consecutive months.

Even so, the price spike hasn't gone down easy with consumers.

"What can you do? It's like gas prices," said Herb Fromm, after lugging groceries to his pickup in Lodi.

Fromm, a retired truck driver, said he and his wife won't stop drinking their couple of gallons of milk per week.

"I drink milk," he said. "I drink a lot of milk — I always have. I grew up on it."

Each month, the state sets the minimum price milk processors must pay dairy farmers (now at $1.98 a gallon for bottling-grade milk), based on current market forces.

Another dollar or more per gallon is added to the cost once the milk is processed, bottled and trucked to grocery or bulk food outlets where the final price is set.

The state sets no maximum for how much can be charged.

Greater demand for milk in China and India combined with a smaller worldwide supply has pushed local dairy prices up, said Michael Marsh, chief executive officer for Western United Dairymen of Modesto.

Normally strong supply in Australia and New Zealand has plummeted due to a prolonged drought. And European dairies are no longer exporting as much milk because plush government subsidies have been rolled back.

"We're kind of in the middle of a perfect storm — it's a positive storm for (local) dairy farmers," Marsh said.

Last year was more of a nightmare for California dairy farmers. More than 90 dairies shut down due to low prices and higher feed costs. And last summer's heat wave killed an estimated 21,000 cows and 10,800 calves, Marsh said.

"Last year, our prices were so low, we're still trying to come out of debt," said Cathy Kaehler, co-owner of Kaehler Dairy Farms off East Armstrong Road, just south of Lodi.

"(Prices) are kind of out of control right now, and we have nothing to do with it.”

Dairyman Jack Hamm said he understands some consumers are experiencing "sticker shock" at the grocery store.

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written by SOY ROCKS!!! , July 10, 2007

This is why I buy soy milk. It not only tastes better, is animal cruelty free, but now its a lot cheaper. You should all try it.