Staff Writer
Milk is giving gas a run for the money.
The price for both products last week was almost identical: averaging about $3.29 a gallon (unleaded regular gas, 2 percent milk).
Traci McCormick, an Ortonville resident, was shopping at Bueche’s Food World, 400 Ortonville Road, last week. In the dairy case were gallons of Country Fresh milk, ranging from $2.99 for skim to $3.49 for chocolate milk. Cook’s Farm Dairy milk was $3.49 a gallon across the board. In McCormick’s cart was a gallon of 2 percent Spartan milk, regularly $3.09, on sale for $2.50. She buys whatever is cheapest.
‘I heard the price could go up to $5 a gallon,? says the mother of two girls, who also babysits her nephews and buys about five gallons of milk a week. ‘I’d have to pay it because milk is a necessity in our house. We’ll struggle a little more, and probably not get other things, like ice cream.?
Gas prices have been rising with steep increases the past few years. The increase in milk prices has come most drastically the last few months, and consumers can expect the price to continue to rise.
‘Milk prices are going up without question,’says John Dilland, general manager of the Michigan Milk Producers Association. ‘Come July 1, there will be a higher milk price. Not sure how much it will go up retail, but probably a 20-cent increase or in that range for wholesale. I could see it going to $3.50 a gallon. If they get to $4, there will be some resistance.?
The main culprit?
Corn.
‘The initial overriding issue is the demand for corn by ethanol plants,? explains Dilland. ?(The demand) has driven up the price of corn.?
Ethanol has long been touted as a clean-burning fuel alternative that can reduce dependency on foreign oil while lowering gas prices.
Dairy farmers feed corn to cattle to increase milk production. Half of the costs farmers incur is from corn, and milk prices must be increased accordingly to make a profit. Dilland says corn prices have doubled in the last year, from $2 per bushel to $4 per bushel.
‘In Michigan, we’re fortunate that most of the farmers grow their own corn,? he said, noting that prices for a gallon of milk in the southern and eastern states have likely already reached $4 per gallon.
Tonja Brice, a Brandon Township resident, buys milk at Costco for her family of five, usually eight gallons of milk every two weeks, paying between $2.09 and $2.29 per gallon at the discount wholesaler.
‘I buy it there because it’s more expensive elsewhere,? she said. ‘I will buy it in this area to save on gas if I need it in a pinch… The price will probably go up, but what can you do? We won’t stop drinking it and I’m not going to not give my children milk.?
Cook’s Farm Dairy has sold milk at a retail price of about $3.50 a gallon for the last three years. Clark Cook, owner of the local farm, says prices on milk are up for a number of reasons, including the price of petroleum (from which their milk jugs and ice cream containers are made), the price of fertilizer, the cost of health insurance for employees, the rise in minimum wage, and the cost of gas itself.
Cook’s Farm has 200 acres of land and rents another 150 acres on which they can grow corn and hay for 165 cows, each of whom eats about 130 pounds of food per day. Besides hay and corn, that food includes soybean meal, which prompts the cows to give more milk, but which is his highest feed cost.
‘In the last 10 years, it’s been cheaper to buy corn than seed and equipment,? says Cook. ‘If the price of corn goes up, it’s to our advantage to grow it again.?
Cook’s Farm Dairy is currently producing 415 gallons of milk a day, an all-time high. They sell their milk at the farm, 2950 Seymour Lake Road, as well as Bueche’s Food World, 400 Ortonville Road, and some smaller retailers. The milk is also used to make their ice cream. Every step of the process is done at the farm.
‘We go with the flow and stay with the market,? says Cook. ‘We try to keep the prices down, but I can almost guarantee they will go up… Gas and milk prices affect everyone. It’s just one of those things.?
Milk won’t be the only price going up at the grocery store. Dilland says consumers can also expect the cost of rice, oats, wheat and soybeans to rise, and with them, the cost of items made with these commodities, all because land that has been used for these food sources will be used to meet corn demand. Poultry and beef prices will rise, too, because of the price of corn used to feed chickens and cattle.
But Dilland is keeping it all in perspective.
‘We should thank our lucky stars that the amount of money we pay for food is one of the smallest in the world,? he said. ‘Elsewhere, food expenses are substantially higher… Ultimately, price has to go up. Do you pay four dollars a gallon for gas or three dollars a gallon for milk? It’s a trade-off. It all has repercussions one way or the other.?