I guess it is a good thing we don't fuel our vehicles on milk...

Cat Herder · Understander of unimportant things

I guess it is a good thing we don't fuel our vehicles on milk...

Cocobeem · Keeper of the Holy Grail

Time to buy that nubian goat...

bokbadok · Senior Bucketkeeper

The current average price is about $3.50 a gallon nationally, say dairy experts. That's more than the current national average gas price, which is $2.975 a gallon, according to AAA.
This is nothing new. Milk is typically higher priced than gas. This just seems like an emotional play... for what, I don't know.

TitusTodd · Senior Member

Part of the reason for the increased milk prices is the increased cost of feed. Feed costs more because the price of corn has increased as demand for corn as gone up due to ethanol production.

Cat Herder · Understander of unimportant things

Yeah... Isn't it wonderful?

So, with the higher demand for feed (since it seems to be being siphoned off for ethanol production), is there going to be a countering effect next growing season with more acreage being put into feed corn?

You would think that if demand is higher, prices are going to go up, and farmers are going to have more incentive to produce instead of leaving fields fallow for subsidies that incent them to not plant...

Not trying to be a doomsayer, but I think this is just the tip of the iceberg that will show how messed up our not so free "free" market has become.

salesortonscom · Wise and Revered Master

Milk prices are based on an index of economic factors that are used in a formula to set prices. Feed is one factor, fuel, inflation, yield levels, demand, energy cost, and state/region. In our area, the price per pound of milk was so low that dairies were actually loosing money. Finally things caught up and they were making money again. But the result was that most dairies under 500 head are now gone because they could not weather the storm. Unfortunately, the permitting process to build a new dairy is so intense you cannot just add more capacity or new larger dairies to fill the demand. Demand is also increasing as more and more cheese plants come on line. Cheese and other dairy products are taking a huge portion of the liquid milk these days.

Prices are also set based on location. Living in dairy country I can still get about two gallons for just over $5. In Florida I hear its about $4 for 1 gallon. Why, transportation costs.

Get ready for some sticker shock at the supermarket folks. Food and fiber have been way too cheap for a long, long time. Just a few years ago the cotton price when adjusted for inflation was actually lower than what it was during the great depression. Margins were razor thin for farmers. Many smaller farmers and/or their wives had to get second jobs in town to keep the family farm. So this ethenol driven boom is going to be good for farmers. Many will be able to pay off some debt and update some equipment.

TitusTodd · Senior Member

We've had a number dairies move into our area from other parts of Texas (for cost factor reasons - location to feed and less flooding and disease, from what I understand). With that now comes Helmar Cheese (a California cheese producer) to an area town. I'm hoping the increased dairy presence will keep a gallon of milk from going $4 or more here.

A lot of manure from dairy and feedlot operations is going to be used locally to fuel ethanol production. Due to a new variant of cotton, we were getting more planted up here profitably but now that corn is the hot seller, I've seen a lot more corn being grown (a lot is going to be used for ethanol, of course).

rayb · Hot Air Balloon

I will always love Cache Valley Cheese!! For a while the Costco here locally carried it. I wept when it was discontinued... wept bitter tears...

Cat Herder · Understander of unimportant things

Did you make them a sweater from your tears after they didn't accept your gift of a sweater made from your eyelashes?