What You Need To Know
According to the U.S. Department of Agriculture milk prices throughout the United States are increasing
The latest USDA Retail Milk Prices Report said the price of a conventional gallon of whole milk is $3.72
Each week, Chuck Ringwalt and Andy Vance discuss a topic of importance within agriculture
Spectrum News 1 anchor Chuck Ringwalt talked with agriculture expert Andy Vance about a recent report about milk prices, and what the findings mean for both producers and consumers.
Ringwalt: “When we look at the USDA’s latest report, milk prices in both Cincinnati and Cleveland are increasing. … Andy, the report looked at those two cities in particular in the Buckeye State and prices across all categories: Whole milk, 2%, etc., either remained flat or increased from last January, so can you explain why?”
Vance: “Yeah, that’s a great question, Chuck. And what we’re seeing in general with dairy prices and food prices, really across the board, is that the same kind of inflationary issues that we’re talking about with a variety of goods and services are going to work in the food sector as well, so when we talk about some of the logistical issues, you know, the shortage of trucks and truck drivers on the road talking about increased energy costs and energy prices, that comes to play in food as well. And so you did see Cincinnati milk prices since January up maybe about 2% on a on a per-gallon basis. If you’re looking at Cleveland, it’s actually up closer to like 19%, according to USDA’s monthly retail survey, so some variation there. Generally speaking, though, milk still a pretty good value for consumers, but we are seeing food price inflation as part of that broader inflationary story you’ve been covering.”
Ringwalt: “Got it. How is this affecting the producers?”
Vance: “Oddly enough, milk prices at the farm level haven’t gone up all that much, and there’s an important thing for the consumer to understand. When you go to the grocery store and you see a gallon of milk that’s, let’s say, $3, $3.50 a gallon, the farmer price for that is actually a lot less. Farmers are getting paid about, let’s say, $17, $18, maybe per 100 gallons of milk. And when you work out the current price of milk on a per hundred weight basis — because that’s how farmers are paid, per 100 pounds of milk they sell — their price should be about double that. Maybe $34, $35, so there’s a huge gap between the farm price and the consumer price. And that accounts for, of course, all of the processing that happens in milk, you know, as we go through and get it bottled into gallon jugs and delivered to the grocery store and all of those things that happen to milk after it leaves the grocery store, but most of the money you pay for milk isn’t going back to the farm gate.”
Ringwalt: “OK, and you talk about producing there. How about consumers? Dairy is involved in many of the foods that we eat. And those price increases will likely make budgets even tighter for low income families.”
Vance: “Yeah, that’s a real concern, for sure. Anytime that you look at food price inflation, you know, you see it as a big challenge for families. The thing that we have kind of hung our hat on as an agriculture industry for my lifetime is that we really and this is this is literally true. It’s not hyperbole. We produce the cheapest, most abundant food supply in the world and the safest as well. The value that families get for their food dollar is immense. You know, we take food safety for granted by and large. The food that we buy at retail. We know it’s going to be safe. We know it’s going to be high quality. We know it’s going to be nutritious and we’re talking about a fresh product like milk, but it definitely is a concern and one that you’ll see legislators, policymakers, U.S. Department of Agriculture-types really watch. If this inflationary trend continues, that food price becomes a real big concern.”
Ringwalt: “Got it. Andy Vance, as always, thank you.”
