Soaring Gas Prices Could Send Milk Above $5 per Gallon

Soaring Gas Prices Could Send Milk Above $5 per Gallon



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Debra Bogstie, NBC NewschannelIt's not just gas prices that are skyrocketing. Experts are warning that dairy prices are about to take off this summer, in large part due to the crunch from higher energy costs.

That means prices for everything from milk, cheese and even everyone's summer favorite, ice cream, may rise. "I won't change my purchasing habits. You have to pay what you have to pay I guess," says Mary Tomeo.

Dairy experts say consumer prices will jump this summer as farmers get higher prices for their products. The reason for that: High gas prices have increased the cost of transporting goods to stores. It's costing farmers more to feed their cows due to the increasing demand for corn to produce ethanol.

Professor Ronald Cotterill runs the University of Connecticut's Food Marketing Policy Center. "But the situation is that milk prices have been high through thick and thin. Six months ago, farmers were getting an extremely low price and milk prices were so high."

Professor Cotterill says we could be paying $4.50 a gallon for some brands of milk this summer and five dollars a gallon by fall. "The reality of it is the pricing in the market channel is out of whack. It's inefficient and it's inequitable," says Cotterill.

The ripple effect could be felt in prices we'll pay for all kinds of products including ice cream cones, candy bars and even pizza. One national chain says cheese accounts for almost one-third of the cost of a pizza.

On the global market milk prices are already rising at the fastest rate ever as the world-wide demand for milk grows in developing countries.

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