No sales impact seen from rising milk prices

Milk prices continue to rise in New Hampshire, and paying $4 a gallon may not be out of the question by summer’s end, according to Steve Taylor, commissioner of the New Hampshire Department of Agriculture, Markets and Food.

But so far, the impact on local businesses and consumers has not been dramatic enough to affect sales. Prices at supermarkets in southern portions of the state vary from a low of $2.79 for a gallon of store-brand whole milk to $3.65 or higher for a gallon of brand-name whole milk.

“The prices may have crept up a little, but not enough to make a difference in our milk sales,” said Janice Clark, manager of Harvest Market in Bedford. “Milk is just one of those staples you can’t do without.”

For Jennifer LeClair, a mother of four teenagers, milk is a necessity she’s just unwilling to do without. “If worse came to worse I might cut back on some of my other groceries – cookies or treats, that we can live without. And really, if your talking 20 cents a gallon that may be a dollar or two a week. It’s not that big of a deal given its importance.”

While rising cost of feed, fuel, power and other variables that go into operating a dairy farm have had a significant impact on the amount of money remaining in the pockets of farmers after selling their milk, it’s actually the U.S. Department of Agriculture that sets dairy prices based on commodities market trading of cheese, butter and milk powder.

“The farmers are the last to be figured in,” said Taylor, a dairy farmer himself. He noted that farmers receive between a quarter and a third of the retail price for their milk.

Currently, farmers are receiving about $20.91 per 100 pounds of milk, or hundredweight, equal to roughly 12 gallons of milk. That number is expected to reach $22.32 by August before it begins to decline, Taylor said.

Last year at this time farmers were earning about $12 a hundredweight. The affect of the low prices that persisted throughout 2006 is in great part responsible for today’s low supply, having driven farmers to sell off a portion of their dairy stock or leave the dairy industry completely, Taylor said.

Increased demand for “table milk” – that purchased by families for home consumption – and increased demands for milk on the global market also have contributed to the current shortage.

“There is a vast array of products made from milk, and overall they’re all reasonably priced, “ Taylor said. “For years milk has been a bargain and that hasn’t changed.” – TRACIE STONE