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Milking Every Penny's Worth

In California, prices are all over the map. But shoppers can save money by paying attention in the dairy aisle.

September 28, 2008|Jerry Hirsch | Times Staff Writer

Have you checked out the price of milk lately? Be prepared to be confused, baffled and amazed.

What people pay for milk in California is based upon a complex combination of state regulations and retailing strategy.

The state determines the minimum price that milk processors -- the companies that bottle milk or turn it into cheese and ice cream -- must pay farmers. The price fluctuates monthly based upon what butter, cheese and powdered milk sell for on commodity exchanges.

Retailers can set milk prices as high as they want, but state regulations prohibit them from selling milk below cost unless they can prove they are matching the price of a competitor.

Depending on the brand and how many cartons you want to purchase, you can pay anywhere from $2.70 to $6.99 for a single gallon of milk, and that's just at one grocery store -- Ralphs.

It doesn't stop there.

The Fresh & Easy Neighborhood Market chain was recently asking $2.99 for a gallon of fat-free milk and $3.18 for low-fat milk, but the price dropped to $3.08 for 2% and whole milk. It didn't charge extra for low-fat milk when purchased in a half-gallon carton.

"It's crazy," said Elisa Odabashian, director of the West Coast office of Consumers Union. "There is no reason why you should pay 50% to 100% more for what is basically the same product. The farmers aren't the ones getting the extra money. The retailers know that consumers just don't shop around for milk."

Consumers should pay attention in the dairy section, even if it just amounts to looking at the prices of the various brands where they shop, she said. It's one of the easiest ways to trim a grocery bill.

Saving just a couple of dollars a week on milk adds up to enough money to purchase about two tanks of gasoline over the course of a year, Odabashian said.

Lots of stores -- not just supermarkets -- sell milk. You can find it in Rite Aid, Target, Wal-Mart, Costco and gas station mini-marts, and the prices can be all over the map.

There are more than a dozen stores selling milk on a four-mile stretch of Los Alamitos Boulevard from Seal Beach to Hawaiian Gardens. They include small Latino grocers, multiple big-chain drugstores, large supermarkets and an upscale Sprouts Farmers Market natural food store. The price can double, depending on where you shop and how much you buy.

Regardless of where it's sold, most milk will be located in the back of the store, forcing people to pass by aisles of other merchandise on the way to the dairy case.

Most milk shoppers "just buy the brand they like and don't pay much attention to what it costs. I will stand in the dairy section of a store and ask people why, and they just say because that's what they like," said Leslie Butler, a UC Davis agricultural economist and milk pricing authority.

Not Paul Curran, an insurance adjuster from Tustin who buys milk for a family of eight, including five children ages 3 to 14 and his mother-in-law.

"We get the brand that has the best deal," said Curran, whose household drinks four gallons a week. His wife prefers Alta Dena brand milk, but he doesn't buy it because "it's twice the price" of store brands.

When Curran needs just a gallon, he'll drop into Trader Joe's or Rite Aid, where a single carton is less expensive than it is at a grocery store. But typically he buys two to four gallons at a time at a Stater Bros. supermarket to take advantage of the volume price break.

That's an important tip, said Butler of UC Davis.

The California Department of Food and Agriculture also advises shoppers to always check the "sell by" date, which allows consumers to know how long milk will remain fresh. Retailers should not be selling any milk with an expired sell-by date. Shoppers should always buy the milk with the latest sell-by date so it has the longest possible shelf life.

Like Curran, Richard McDonough, a literary agent from Fullerton, doesn't think much of brand-name milk. "I get nonfat milk from Trader Joe's because the price for a half-gallon container is about a dollar difference for the same commodity sold at Ralphs, Gelson's or Albertsons."

Many moms will attest that buying the least expensive milk isn't as easy as it might seem.

"My kids can tell from the other room what type of milk is in the cup," said Lori Hoolihan, a south Orange County mother of three who has a PhD in nutrition and works as a dietitian for the Dairy Council of California.

"Nutritionally, all of these milks are the same. There is no difference between the 1% sold at Costco and the 1% sold at an Albertsons," Hoolihan said.

But Hoolihan and other experts in the industry acknowledge that milk from different producers can differ in taste. They say it's a result of many factors that include what the cows are fed, the pasteurization process, the temperature at which the milk is kept en route to the store and at the store, and whether it is in a plastic container or cardboard carton.

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