Does anyone think a $.20-$.30 per gallon rise in the cost of milk will negatively affect their milk consumption? I understand the effect on farmers but what of producers who use milk in their final products?
The post has a good and more recent article on this but it's a bit long winded.
Here's something short.

Dairy farmers hope for milk price rise

Wednesday, 21/03/2007

Dairy farmers are hoping they will have more in the bank next year, as talk of higher milk prices gains momentum.

Milk processors will release new season prices in June, with some forecasters already tipping an increase of up to 20 per cent.

Analyst Steve Spencer says with less milk and strong international demand, farmers can expect good returns.

"To what extent they come off or weaken and where our currency goes, we're still looking at a pretty good uplift in milk prices going into the next year - I think 10 to 15 per cent over a full year," he said.

"Therefore if there is a break in drought conditions, and there is a basis for feed grain prices to come off a bit, having that sort of price environment makes a stronger rebound more likely."