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Dairy prices continue to climb

05 July 2007

US - The sign on the refrigerated dairy case at Kroger seems to say it all. It's a memo to customers, posted conspicuously next to shelves of lowfat, reduced fat, vitamin D and skim milk.

"Prices for milk and dairy products have been rising rapidly," the letter states.

It goes on to cite information from the International Dairy Foods Association, attributing the rise in milk and dairy product prices to a host of factors, including strong worldwide demand, rising farm production costs and a slowdown in milk production.

"The International Dairy Foods Association is projecting that milk costs will continue to increase throughout the summer, peaking in late October 2007," it read.

For consumers, the news does not bode well. The prices, on a recent day at Kroger, ranged from $3.85 to $4.14 a gallon. Last year at this time, a gallon of whole milk went for an average of $3.16, according to a U.S. Department of Agriculture report.

For Betsy Franklin, a 33-year- old Jackson resident with a big milk-drinking family, the hike prompted her to issue a household edict: "Don't be drinking too much. Save some for the cereal for breakfast," she'll tell the three children still at home.

Bill Herndon, a Mississippi State University Extension Service professor of agricultural economics, said Kroger's memo summed it up well.

"We're selling more and more milk into international markets and growing economies like China and India, where they're seeing a lot of their rural people move into industrial areas and get middle-class jobs," he said. "They find that they want to eat dairy products now and they don't produce very much milk."

Milk production has been on a downward trend for years on the eastern side of the United States, he said. Mississippi's dairy farms have been dwindling, now down to 168. There were 700 dairy farms in 1990.

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Source: Jackson Clarion Ledger


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