According to CNN Money, the price of a gallon of fortified whole milk has risen by 7.5% over the past year. The Bureau of Labor and Statistics estimates the average price of a gallon of milk in April 2014 at $3.69. This is the highest price since September 2011.
According to an article from Bloomberg, the price increase is due to both supply and demand factors:
Increased demand for dairy products around the world, particularly in China, is doing for U.S. farmers what decades of farm policy could not: sell off all the milk their cows can produce at record-high prices.
The good fortune of U.S. dairy farmers is due to exploding demand from an emerging global middle class, but also to misfortunes elsewhere. In China, domestic dairy has been hampered by production problems and lingering distrust among consumers about safety. In New Zealand, the global leader in dairy exports, a 2013 drought reduced the country’s ability to meet foreign customers’ needs. In the first quarter of 2014, the value of U.S. dairy exports grew 39 percent.
While this is beneficial to American farmers, the average American consumer will have to pay more at the supermarket. As milk is considered a staple good, this price increase will have an impact on many consumers across the country.
Read More Here- “America’s Got Milk and China Wants It” (Andrew Martin, Bloomberg Buisnessweek)
Read More Here- “Milk Money: Dairy Prices on the Rise” (Melvin Backman, CNN Money)