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Got Milk? You Might Need Some Extra Cash First


Warning milk drinkers, you might want to start tightening those purse strings, the cost of milk is going up. Since January, the price of a gallon of milk has gone up a dollar in California - bringing the minimum retail price for a low-fat gallon of milk to $3.10. Similar pricing issues are being felt across the country and are said to be caused by several factors:

  • High price in the corn-based feed the farmers provide to their cattle.
  • Drought in Australia has challenged their highly exported dairy industry.
  • Fewer supplies coming from Europe due to a cap on dairy subsidies.
  • High demand in Asia and other nations with developing economies.
  • Increased gas prices mean increased delivery costs.

Not worried because you don't drink milk? Think again. This pricing structure might end up effect your lattes, chocolates, and cheeses too.

In May, the Hershey Co. in Pennsylvania revised its 2007 earnings expectations, saying higher dairy input costs are "adversely impacting'' its outlook.

In Seattle, a spokeswoman for Starbucks Coffee Co. said that dairy represents from 5 percent to 10 percent of the company's costs, "and as such will put pressure on our cost structure in fiscal 2007.''

In San Francisco, Todd Parent, chief executive of Extreme Pizza ... said he expects to raise prices $1 per pizza in the near future -- a 3 to 5 percent price increase -- to cover costs.

Something tells me this might be a bad time to develop an ice cream sandwich habit...

Source: San Francisco Chronicle

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