Milk Prices Up 23.2% In 2007

CNNMoney says that milk prices have soared 23.2% through November of this year, and people are cutting back on the amount of milk that they purchase.

John Norris’ family is drinking a lot less milk these days. He said he considers the higher prices and has cut back on his kids’ milk consumption. But between work and family obligations, he still drives almost as much as he used to.

“That’s the reason I cut down on milk consumption – so I can drive my car,” said Norris.

And Norris should know. He’s the director of wealth management for Oakworth Capital Bank and a food price expert.

The Norrises aren’t the only family getting pinched at the grocery store. Prices of food and non-alcoholic beverages rose 4.7 percent since the beginning of the year through November, outpacing the 4.3 percent increase in the overall cost-of-living, according to the federal government’s Consumer Price Index.

Everyday foods like fruits and vegetables, beef, poultry and cereals are on the rise. The price of milk is the biggest culprit, with a staggering increase of 23.2 percent through November. And with basic foods like dairy and wheat driving up the cost of other groceries, almost everyone is feeling the squeeze.

Are these price increases hurting you? Are you drinking less milk?

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Food prices soar in America
[CNNMoney]
(Photo:pierre lascott)

Comments

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  1. HRHKingFriday says:

    a) Milk is a staple, one of the best sources of protein that costs much less per serving than meat or nuts.

    b) Milk will last longer, gallon for gallon, than Gasoline.

    c) What, are you going to replace it with soda?

  2. mikesfree says:

    At least cars dont run on Milk

  3. Buran says:

    And what is he driving? An SUV or small hatch?

  4. MameDennis says:

    As a percentage, it’s been a very steep price increase, but as a real number… I can absorb an extra $2 a week.

  5. timmus says:

    Research at the University of Maine and Penn State
    University indicate that in store costs for large chain stores is as low as 20 cents per
    gallon and ranges up to 40 cents per gallon in smaller supermarkets

    Apparently the supermarkets are largely to blame for the high prices of milk, not processors and dairy farms.

    [www.fmpc.uconn.edu] (PDF)

  6. HeyThereKiller says:

    Chuck Norris on the other hand…

  7. Anitra says:

    Nope. No kids here, so we only use about a gallon every 10 days. I’ve just looked more carefully at where I buy my milk – the local gas station has it for $1.50/gal less than the grocery store (but the discount is only for 1% milk, for some reason).

  8. mopar_man says:

    I drink a lot of milk myself but I’ve tried to cut down due to the price. Eggs have gone insane too. They jumped $1.50/dozen in the last couple weeks here.

  9. ConsumptionJunkie says:

    Milk is disgusting! It may be good for baby cows, but not humans.

  10. ManicPanic says:

    Well, the prices of non-alcoholic beverages rose 4.7 percent so what does that tell us? Drink more alcohol. that is, unless, you are partial to White Russians in which case you may want to rethink your mixer choice.

  11. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    “Do” to it’s high cost?

    Good God guys, get an editor, or let me do it.

  12. johnva says:

    Interestingly, organic milk doesn’t seem to have gone up in price nearly as quickly. The price difference is now much less than it used to be between organic milk and conventional milk. The price I pay for milk has barely changed (since I was already buying Organic Valley). This is completely affordable for us because we don’t drink a huge amount of milk. According to a quick Google search there is a glut of organic milk due to a massive increase in production, but not of conventional milk.

  13. Rusted says:

    Lactose intolerance…yes! Hot lemon tea in my cup right now.

    @ConsumptionJunkie: Absolutely, nastiest stuff I ever drank as a kid.

  14. smitty1123 says:

    @ConsumptionJunkie: My coffee begs to differ.

  15. @mopar_man: Eggs are what I don’t buy as much of due to price. I only buy the small containers of milk anyway. But between the jump in price and the drought (I like to boil my eggs but it seems like a waste of water now) I buy fewer eggs. Buying fewer eggs lets me buy less cheese too (esp. since I can’t boil them), which has also gotten pricier.

  16. Trai_Dep says:

    If he’s Director of Wealth Management and must choose btn gasoline or milk, I’d hazard to guess he’s a Hummer driver.

    The CPI is woefully outmoded. Gas and food are spiraling, ever upwards, because of macro trends, yet being excluded allows Paultards and the rest to trumpet “great” economic figures.

  17. Trai_Dep says:

    @Jaysyn: Err, “it’s” should be “its”, Mr. Grammarian. :P

  18. laserjobs says:

    I can hock up huge lugies after a cup of milk

  19. Freedomboy says:

    Does anyone know if the rest of the world eats milk and eggs like we do? Saw very little of that in Europe but I wasn’t in homes just tourist venues. No where else has the vast milk farms do they? Beef is rarely eaten as well. Are the facts such that American production of food is so wrong we have invested in the wrong end of things on every level? Sure will be odd if milk becomes rare and the entire food chain here is tossed when we can’t afford to grow it due to energy and transportation oosts making it only for the few. Fodd allergies might be better though, bright side I guess.

  20. LiC says:

    Only buy it at Dillons/Kroger. They run a 1 gal/$2.99 special every couple weeks, and that’s how often I buy it.

    My dad worked in a grocery store for about 15 years, he said that price of milk always went up when minimum wage did.

  21. Womblebug says:

    I’ve found that if I buy a marked down gallon close to its expiration date and freeze it, it thaws out nicely and lasts a long time once it is thawed. I use powdered milk for cooking, but that’s gone up too.

    Eggs, yeah. $1.93 a dozen yesterday. We’re not eating many omelets.

  22. iamme99 says:

    I’ve taken a liking to Trader Joe’s organic milk lately. $3.29 the half gallon and lasts me one week.

    TJ’s eggs are about $1.50/dozen and I eat 2/week. So that serving costs 25 cents per week. :)

  23. ShadowFalls says:

    Sadly, I have found that the cheapest place for a gallon of milk is CVS Pharmacy. (name brand too) And the place who touts itself as “Everyday Low Prices” also known as Walmart, is the highest. Walmart’s store brand is higher than anyone else’s milk, their name brand is even higher.

  24. Rusted says:

    @Freedomboy: We are actually fifteenth in consumption of milk. Finland is first.

    Here’s a table at this site. [www.foodsci.uoguelph.ca]

  25. catnapped says:

    Well, no worries here in Pennsylvania, cuz you pay whatever the state says you pay (same price at 99.9% of the stores that sell milk)…whole is currently a hair under 4 bucks a gallon.

    Oh and about those eggs… ($2.25-2.50/dozen and climbing)

  26. u2acro says:

    Did anyone else wonder why a washed-up MTV News guy was bitching about milk prices?

  27. char says:

    I generally buy the organic stuff anyway, the price seems to have been pretty flat in that respect.

    Eggs have been going up up up though, $3 a dozen for free range, youch.

    Food isn’t a huge part of my budget though (and I eat pretty well) so it hasnt hit too hard. Don’t drive either.

  28. EtherealStrife says:

    @Rusted: I’m going to start up a dairy seal company if this gets any worse. 3-4 x the protein that’s in cow milk, and almost no carbs.

    Or failing that, dairy mice.

  29. UpsetPanda says:

    Nature’s Promises Organic is generally $3.45 for a half gallon vs. Horizon which is $4.19 per half gallon. Though, if you’re going to drink a lot of milk anyway, Horizon’s 1 gallon organic is usually $5.99. Cheaper when it comes to $$/gallon vs. $$/half gallon.

  30. overbysara says:

    can I still vote if I drink soymilk?

  31. HRHKingFriday says:

    @overbysara: No.

  32. SkyeBlue says:

    One thing I do kind of splurge on is organic milk and eggs (to me they taste so much better). The prices of both have not really gone up at all, but I have noticed that both non-organic milk and non-organic eggs have gone way up in price, at least here im my area the price of the eggs has almost tripled.

  33. Electroqueen says:

    My god, 1.65 to 2.15 for a half-gallon, and .99 to $1.79 for white eggs within a year at my local meat market. When will it end?! Darn gas prices and slagging economy.

  34. Geee, considering what you pay in other places for milk ($2/l for local non-organic, $3/l for Organic) the price increases in the US are…. Well, welcome to the rest of the world.

    As for my milk consumption, it hasn’t changed, I usually don’t drink milk plain, either I put it in my coffee (foamed and straight) or use it for Hot chocolate.

  35. SaraAB87 says:

    Milk is 2.69-2.99 a gallon here for non-organic. Organic is about 6$ a gallon.

    I second the fact that walmart has the HIGHEST milk prices. Funny as thats the store that gets cleaned out of milk first in our area. Same with Aldi, their milk is gone right away, I have noticed that Aldi is only stocking milk in half-gallons now to make it seem cheaper, what a tactic!

    The biggest joke is that Sams Club charges a higher price for milk than Wegmans (local grocery store) and we are PAYING for a membership to Sam’s, milk should be cheaper there!!

  36. Robobot says:

    I’m glad the state of the milk market is getting more media attention this month. I work for a small cafe, so milk and coffee prices are affecting us big time. We might need to raise prices after the new year, making it the second price hike in 6 months due to the cost of milk.

    People are ordering less bulk milk now that prices are so high, so our dairy has started charging an extra “delivery fee.” Basically they tack on a $50 charge to every delivery to our warehouse. They split our weekly orders into the smallest deliveries possible to turn more profit off the delivery fees. I should note that we have to pay the same price per gallon as consumers, so with thousands of dollars of milk delivered every week the fees add up fast.

    (So, uh, if you happen to go to a drive-thru coffee shop in rural Northern Virginia, cut the baristas some slack over the prices. Please.)

  37. JeffM says:

    Yup, definitely buying less milk. Not really because I can’t afford it but rather I’m somewhat irritated by the price increases and I guess I figured I’m protesting with my dollar.

    I used to always buy 2 gallons for $3.99 at Safeway in the SF Bay Area because one cost like $3.49 and to was $4- seemed to make the math easy, now that one gallon is $4.19 and to get two is $6.19 so I’m not buying that extra gallon since sometime I’d never get to it. :P

  38. McKay says:

    It figures that gas prices are playing into this, and as Timmus pointed out, supermarkets are also contributing.

    But it sure doesn’t help that milk production/distribution is a state-sponsored cartel (PDF), maintained through traditional political cronyism.

  39. zolielo says:

    @HRHKingFriday: Really milk last longer than gasoline?

    @trai_dep: I only more people knew the truth about the CPI… It is so far off for various reasons.

  40. zolielo says:

    @McKay: I was just going to bring that up as well. Bit of WWII logic that could well be outdated.

  41. bohemian says:

    I can get a gallon of organic milk for $5.95 if I go to the right store in town. Go to another location of the same chain across town and the exact same gallon is $7.99

    We cut down on our milk consumption. Eggs are freaking crazy price wise. Someone was asking the city about allowing people to have chickens in city limits last week. They were just shy of $3 for an 18 ct carton of eggs. A dozen were on sale for $1.68

  42. Tsalagi says:

    Regular whole milk is $5 a gallon where i live. Eggs are $2.98 a dozen and climbing.

  43. RvLeshrac says:

    This wouldn’t be a problem if we’d stop selling milk by the gallon, and stop shipping so much to stores at a time.

    More wasted milk == higher cost.

    We used to throw out pallet upon pallet upon pallet of milk at Kroger.

    Ironically, less would be thrown out if the cost went down.

  44. Christan_Eff says:

    In 2005, Kroger would run $1.99 gallons around once a month here in Atlanta.

    That deal is a distant memory.

    Cheapest I know of right now in the ATL is actually at Whole frickin’ Foods, $3.39 a gallon if I am remembering correctly. (Whole Foods in the article photo. Everything else there is super expensive, even for health food.)

    When I make it to Kroger, they sell the “about to expire” milk for prices not too much higher than the sale price from above. (I walk; Kroger’s the farthest grocery from my house, so I don;t know their current prices.)

    Didn’t milk used to be a price leader to get you to buy other crap at exhorbitant prices? (Not a loss leader, since they still profited mucho, but an item that went on “sale” frequently, at least.)

  45. Erwos says:

    Meh. I usually buy the fake egg stuff anyways – far healthier than the regular stuff.

    Someone mentioned CPI being outdated, and I’ve had this argument with another non-economist friend of mine. High oil costs are inflationary across the board – that is to say, even if CPI isn’t spiking because your pet product (food) isn’t on there and that’s spiking, it’ll still show inflation over time in the other areas. If you don’t like CPI, there are other indices of market baskets you can use, but CPI is nice because you can actually compare to other countries.

    My wife and I simply started shopping for food in a smarter fashion, and we actually trimmed a good bit of cash from our food budget with no real effort or major time investment (certainly not less food!). The secret is _planning your purchases_. PeaPod and Safeway’s equivalent service are fantastic for this, even with delivery fees.

  46. synergy says:

    Another option should be “I rarely/don’t drink much dairy, so I don’t notice the change.”

  47. synergy says:

    I wonder if anyone’s done a blind test making people eating organic vs non-organic eggs or drinking milk and see if they can actually tell the difference without seeing a label.

    It reminds me of the tests done with faucet vs bottled water. It would be interesting if people could actually tell the taste difference.

  48. Trai_Dep says:

    @synergy: I know my sainted grandma, used to organic (back in her day, ALL milk was “organic”) milk, had to switch to half-and-half for her breakfast cereal (shredded wheat and precisely HALF a banana) to keep the same flavor.

    So either all those Happy Hour ice-cold martinis (yeah, she’s THAT kind of grandma, bless her) wilted her taste buds, or there’s something besides marketing about organic vs regular milk.

    Don’t get me started about her quest for “good” olives. She went to Italy and spent more time hunting them down (heh, soaked in gin & vermouth) than she did in Vatican City.

    Don’t mess with Grandma’s martinis, her shredded wheat or her milk. Or you’ll get such a spanking!

  49. kimsama says:

    @johnva: @SkyeBlue: I have noticed that organic milk doesn’t seem to have gone up too much, either. However, I instantly noticed that my free-range eggs were 25% more. Sigh!

  50. bunnymen says:

    I don’t drink milk. My s/o drinks about two gallons a week (no, that is not an exaggeration) and I sincerely doubt he even looks at the price.

  51. johnva says:

    @synergy: It’s not just about taste. There are plenty of other reasons to buy organic. For example, animal welfare, worker/farmer welfare, environmental reasons, etc.

    That being said, I do believe the quality of Organic Valley milk is much better than most of the store brands. It is much more consistently high quality; occasionally I would get a bad carton of the conventional stuff that had “off” taste or smell. It also consistently lasts much longer (like 2-3x longer), which tells me that it’s likely much fresher where I get it. That’s good for me because we don’t drink much milk, and it’s one of the main reasons I buy it. Also, not all organic is equal. Organic Valley is one of the best national organic brands while Horizon and Aurora have both been accused of violating the organic standards.

  52. zolielo says:

    @Erwos: The CPI as systemic problems.

  53. RvLeshrac says:

    @trai_dep:

    You aren’t talking ‘organic’ there. You’re talking ‘cream-on-top’ unhomogenized milk. It tastes a bit richer, at least for part of the bottle, since you have to mix it (or skim off the cream, making it *ta-dun* skim milk).

    Or, actually, you might be talking unpasteurized.

    “Organic” milk is a stupid, worthless label. It simply means that the cows have not been treated with rBGH. No study, ever, anywhere, has shown any difference between milk from treated and non-treated cows.

  54. rdunlap says:

    @Christian-Eff: Best I’ve found in Atlanta is Sam’s Club, ranging from $3.11 for skim to $3.49 for whole this week. Harry’s (my local “Whole Foods”) isn’t even close.

    I’m also getting soy milk (for the child with a milk allergy) for $6.64 for 1.5 gallons at Sam’s. It’s been stable through the milk price run up… so if milk runs up much further, soy milk will become the frugal choice for us.

  55. johnva says:

    @RvLeshrac: Wrong. Organic milk is not just non-rBGH milk. It also means that they are fed pesticide-free grain, that they have “access to pasture”, and that they aren’t routinely treated with antibiotics. In addition, many organic dairies have generally higher quality standards than conventional, commodity milk dairies (above and beyond the USDA standard). This is why you should actually research the brand you are buying if you are going to buy organic.

  56. Rusted says:

    Organic means not mineral.

  57. RvLeshrac says:

    @johnva:

    Wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong.

    I don’t know how many more times I can say THAT.

    “Organic” is an official labeling standard. If you want to go BEYOND that and investigate the dairy, that’s fine, but don’t throw all that out there and say that “Organic Milk” meets all of those criteria.

    Further:

    1) rBGH has been shown, by numerous scientific studies, to be harmless (obviously in low doses) to humans, and has been shown to not affect the composition of the milk. rBGH doesn’t even show up in the milk.

    2) I’ll grant that better feed makes better milk. That’s pretty obvious.

    3) Happier and healthier cows also make better milk. Overuse of antibiotics is bad, but I want the cows to be well taken care of – that includes proper veterinary treatment.

    4) “Higher quality standards” sounds like the same rhetoric used by the water bottlers. Unless you’ve actually inspected the facility, never trust that they’re holding themselves to a “higher quality standard.”

    I know plenty of restaurants that will say the same thing, but they still aren’t going to throw out a $60 steak because it hit the floor.

  58. johnva says:

    @RvLeshrac: Maybe before calling me wrong you should look up what the USDA Organic label actually means. You are the one who doesn’t know what you are talking about. It IS NOT JUST lack of rGBH. It includes the things that I listed (no rGBH, pesticide-free grain, “access to pasture”, and no routine use of antibiotics). I do think the label probably doesn’t go far enough by itself, which is why I research the specific brands as well.

    1) I know that. I don’t think the concern is that it’s affecting the milk directly. As I pointed out, quality of the milk itself is not the only reason people buy organic.
    2) Yes. Agreed here.
    3) They are allowed to use antibiotics to treat actual illness in the cows and still label it “organic”. They just can’t use it on ALL cows as a preventative measure. No one is advocating that they not get proper veterinary care.
    4) I don’t. But I’ve read reports from people who have. That’s why I don’t bother with some “organic” companies like Horizon and Aurora.