Milk Could Hit Record High Price
COLUMBIA - Grabbing a gallon of milk at the grocery store could hurt your wallet come March.
NBC reports that dairy analysts estimate store milk prices could go up 60 cents next month reaching their highest cost to date. The average price of milk is $3.50 per gallon.
Strong global demand has led to increased exports of U.S. dairy products in recent months. This increase has generated more money for dairy farmers but could also result in price hikes of up to 20 percent in some stores.
Joe Horner a dairy economist said there's a number of reasons why prices might go up.
"The demand shock has come from China, Asia and northern Africa, we've seen a really strong export demand this year. We're now exporting milk from one in six cows in America," Horner said.
He also points to the drought in California as a reason for why consumers might see a price increase.
Production of alfalfa which is a key feed for cows has been affected by the drought out west.
Cheese is also to blame. A short supply caused cheese to jump from $1.80 to $2.36 a block in January. That increase is another driving force for the March spike in milk prices.
Horner said it's unsure how long prices will stay high. He said a lot of it depends on when the West gets rain but eventually the prices will cycle.
Reuters reports the trend is reversing itself and price spikes should be short-term.