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The Dairy Best Is Dairy Dear

July 18, 1996|RUSS PARSONS

Got milk? Didn't think so.

Prices of dairy products are up across the board. A gallon of milk is almost $3, an increase of about 25% from last year. Butter is up almost 50% at retail since May and has doubled in the commodities market since mid-April. Ben & Jerry's has raised the price of a pint of ice cream by a dime.

Blame it on the Midwestern drought.

How does hot, dry weather in the Midwest translate into hot, dry milk drinkers in California? It's not nearly as complicated as it might appear.

Several years of hot, dry weather in the nation's grain belt have driven prices for corn and wheat to record heights. Dairy farmers, who use corn and wheat for feed, are faced with the option of either increasing their prices or cutting back on the number of cows they raise.

Dairy products aren't the only food products affected. The price of pork is up too. Bacon has climbed more than 20% in the last year, along with eggs. The price of beef, veal and poultry has increased 5% to 7%. Cows, pigs and chickens eat grain too.

Interestingly, the increase in the price of wheat has had only a small effect on the cost of a loaf of bread--pushing it up about 15% since last year. That's because wheat makes up only 5 to 7 cents worth of the cost of the average loaf. Milk and meat are more sensitive because feed makes up as much as 50% of the farmers' costs.

Things probably won't slow down soon. The price farmers get for raw milk jumped 20% in June and the price of corn hit an all-time high on the commodities market last week.

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