Forum Post: Milk....The new Gas!!!!
Posted 13 years ago on Oct. 11, 2011, 2 p.m. EST by robertred85
(35)
This content is user submitted and not an official statement
I went to the grocery store yesterday and was amazed that my family has been paying $4.35 a gallon for milk. I asked the store manager, if he really expected us to believe that it costs more to milk a cow, than it does to refine oil into gasoline... He stared at me for a moment, to see if I was serious... he decided I was, and replied the he honestly didnt know how the price per gallon is determined. I looked up what I could on the internet to only find one answer that seemed accurate, according to the New York Farm Bureau · 159 Wolf Rd., Albany, NY 12205 · 800-342-4143 · www.nyfb.org > The average dairy farmer receives $1.20 per gallon. So we are left to believe that the additional cost is in the processing of the milk to make it safe for our consumption. Again I state that are we really going to believe that it costs more to milk a cow than it does to import oil from a foreign country, and refine that oil into gas . Yet another in the ridiculous scams out there, that the government uses to drain the average persons wallet. Whats next charging a tax for the very air we breath! I have five children, and $20.00 or more a week for milk is larceny! Thats $80.00 to over $100.00 per month for my family, thats more than we pay for the propane or cable. So if you "got milk" count yourself lucky. So here is a 44 yr old pissed off dad signing off, to find out where he can Occupy in his community, to get some justice.
Cows are an enormous source of global warming methane. The EPA is constantly cracking down on dairy farmers to make sure they are in compliance. Once Milk is 20$ a gallon, i think we will have saved the planet.
supply, demand, inflation, a weak dollar are reasons why milk is expensive
Perhaps you shouldn't have cable. Obviously you need to heat your home in the winter, but it isn't exactly necessary to cool it in the summer so that's another expense you can live without. What other expenses are you going through which you can remove? We're currently budgeting, and if money gets tight we might only use the car to run errands, and to plan them efficiently so gas is not wasted. Things like this. Plus it feels better walking during the day or evening, seeing the sun outside, rather than doing other things like go to the mall (artificial lighting). Not sure if this advice helps or not but it's better than nothing, good luck and God bless!
I feel your pain. I have four small children myself and every time my wife comes home from costco, the boxes are getting smaller and smaller.
I think it has something to do with corn prices. Not sure. Now they are saying that peanut butter is going up. Well. There goes the peanut butter.
I don't think any group has control over milk prices. It is close to being a free market item. Rising milk prices might reflect a reduction in supply or increased costs to suppliers who are paying higher prices for distribution or refining. I
Cover Girl nail polish is $900 per gallon! http://www.cockeyed.com/science/gallon/liquid.html
Holy Crap!
I know that in my state the Milk Marketing Board (government agency) sets the minimum price that milk can be sold at. Many, if not most, stores sell at this minimum price. Another case of government intervention in the free market.
Its how they determine the minimum price that I'm having an issue with. Any ideas on how that math works?
I'm not sure that this will help, but
http://www.ers.usda.gov/publications/aib761/aib761.pdf
I don't think that the stores are getting rich selling milk.
you don't buy gasoline in 1 gallon containers that have to be trucked from a packing plant to a store in a refrigerated truck and stored in a refrigerator in an air-conditioned store. The packing, distribution, and storage costs are much higher for milk than they are for gasoline. Then there are the additional compliance costs with milk since it's a food product and subject to FDA Regulations in production and handling.
Then sell me two gallons at a time at a discounted price!
According to the FDA worksheet the average costs of shipping, and.. pasteurizing and homogenizing of a gallon of milk is $0.62. Since the farmer himself averages $1.20 per gallon, that a total of $1.82 per gallon, from start to finish. Future predictions are that milk will be over $ 5.00 per gallon by the start of the new the new year. When does price gouging come into play?
You don't pay tax on milk. Ask the grocer what he paid for it. People buy less but business refuses to see a loss of profit, or even to not meet profit projections that are always higher than current profits, so they will increase the cost to you of the things you are buying. You have to find the wholesale price.
According to the FDA worksheet the average costs of shipping, and.. pasteurizing and homogenizing of a gallon of milk is $0.62. Since the farmer himself averages $1.20 per gallon, that a total of $1.82 per gallon, from start to finish. Future predictions are that milk will be over $ 5.00 per gallon by the start of the new the new year. When does price gouging come into play?
Here is a very recent article from NY blog rather than a trade journal, but it discusses trade group and government controls of pricing:
http://www.wnyc.org/blogs/wnyc-news-blog/2011/oct/03/high-price-milk-out-reach-low-income-new-yorkers/
Here is the federal site, and it is complicated. Explains why they are opposed to buying direct from the farm, though. Its federally controlled (supposedly to protect the consumer and the farms) but also takes into consideration milk that ships overseas and the level of demand for foreign trade.time to buy a cow...
I agree with your statement that they are supposedly in place for are benefit,but usually the benefit is not ours. Kinda like the federal banking and regulations commission. LOL!
http://www.fmmone.com/
Some stores have their own brand, name brands stock themselves in the store. The brands may all buy from a central processor, or may run their own processing. So if we say the price going out the door from the processor is $1.82, then everything else is being tacked on at the grocery store. However, I have to ask when the data from the FDA was written. The price of grain and gas drive the price the farmer can ask, and the shipping, as well as the processing operating costs. There should be some fluctuation to the price at the store that reflects all of this. It still seems too high to me, so I'm going to see if I can find some articles on business pages or trade sites. Nice job on your fact finding!
I found a P&L statement from the FDA on their site that gave average cost of a dairy farmer with 250 head of milking cows, they calculated the costs on a per head basis including feed, illness, milking machines costs on a per teet basis, along with processing costs to transport, refrigerate, homogenization, and pasteurization. Also included was labor, electricity, heating, and land costs as you have to have so much land per animal. There was a section on potential costs in the future for methane emissions ...... really? Paying for cow farts? But apparently green house gas is a factor here somewhere, although they are not in the calculation I read. I still agree that no matter how we do the math, its still does not add up. It would be nice to here from an actual Dairy Farmer on the issue. Maybe they can shed some light on the topic. The grain issue you stated seems to be low on the totem pole as they stated that the milk is turned to whey and fed back to the animals, mixed with feed, but the majority of the diet consists of materials grown by the farm or produced by the animals themselves. Still putting milk on the table for our children should have to be this hard.
Think back on all the times the farmers spill out tankers of milk to protest prices regulated too low for them to break a profit. The current price increase is fair to the farmers, but every step down the line increases the price as each step expects some level of profit. Profit is required because everyone has to plan for when something goes wrong (weather to equipment breakdown) not to mention the rising fuel and power costs. Yet this inflation in commodity prices is not being matched by rising consumer wages, but rather reductions in wages due to cuts and increasing requirements for paying toward healthcare and retirement. The only place there is wiggle room is in net profit that goes toward dividend payouts to stockholders. I'll tell you I had 20 shares of an industrial businesses stock...my dividend quarterly payments never exceeded $10.00. To make money from dividends, you have to own a huge block of stock. Who are these people? The 1%, not the rest of us. Thus, that net profit that is making even milk get too expensive for a growing number of families is contributing to the ever rising wealth of the 1% even as dairy farmers barely make ends meet. An important factor is the fuel prices as this impacts all aspects of the process, and we know the fuel companies are making outrageous profits. Companies are never satisfied with a steady and moderate profit. They set higher goals for it each quarter, and when they fail to meet that inflated profit, stock value goes down, and the company takes measures to rebuild faith in speculation by cutting costs, ie employee wages, benefits, or numbers. It is unsustainable as a a system.