Milk it while you can. Price tags on everything from french onion dip to sour cream are falling. And though a drop for a nutritional staple like milk points to major economic trouble, consumers nonetheless are reaping the benefits of the plunge in dairy prices.
Milk it while you can.
Price tags on everything from french onion dip to sour cream are falling. And though a drop for a nutritional staple like milk points to major economic trouble, consumers nonetheless are reaping the benefits of the plunge in dairy prices.
Shoppers at Haddad's West Peoria Market, for instance, could buy a gallon of skim milk for $2.69 on Thursday. At the same time last year, it was about $4.
"The price of milk has dropped quite a bit in the last six months or so," said Haddad's owner Mark Wrhel. "Cheese, not so much, because processing puts it several months behind the trends, but everything tied to butter fat is headed downward."
Prairie Farms CEO Ed Mullins said the government has a complicated formula for setting commodity prices - milk included - and the markets are collapsing because of those low prices and "almost non-existent exporting."
"The reason milk prices are going down so fast and so dramatically is due to the rapid fall of the commodity price market for cheese, butter and milk powder," Mullins said.
That benefits consumers because low milk prices are reflected on most dairy products in retail stores.
"It's simple. If milk goes down, we pass that on to our customers, and our customers pass that on to the consumers," said Mullins, describing Prairie Farms and other milk distribution companies as the "middle man" between farmers and retailers.
But Wrhel said he's not sure customers have noticed the price difference.
"Milk is one of those things that if you need it, you're going to buy it," he said. "It's a must-have commodity."
Mullins and Wrhel both anticipate prices will continue to fall, at least during the next month, before they pick up again. However, prices can't fall much more, because dairy commodities already are at or near federal support levels.
That's bad news for dairy farmers.
Fred Rosenbohm, a local farmer who keeps about 100 cows at Linden Hill Farms, has been forced recently to turn some of those cows into hamburgers.
"Last month I sold four to be butchered," Rosenbohm said. "I sure would have liked to keep them, but I have to feed my family."
Dairy farmers sell milk in 100-pound increments. This time last year, Rosenbohm was getting about $20 for every 100 pounds, he said. Now he's selling the same amount for $12 to $14, and it's going to get worse before it gets better, he fears.
"Low prices are making it hard to stretch the dollar," he said. "I don't know what I'll do if they keep dropping."
Rosenbohm foresees having to sell more cows to packing houses next month because the government is expected to set milk prices even lower on March 1.
Dairy industry officials predict more than 1.5 million of the nation's 9.3 million milking cows could be slaughtered this year as dairy farmers take drastic measures to cut costs.
Mullins said anxiety is widespread among Prairie Farms' 743 members.
"They are very concerned about how they are going to survive with the low prices they are receiving from the government," he said.
Erin Wood can be reached at (309) 686-3194 or email@example.com.