MILKING EVERY PENNY’S WORTH
Have you checked out the price of milk lately? Be prepared to be confused, baffled and amazed.
What people pay for milk in California is based upon a complex combination of state regulations and retailing strategy.
The state determines the minimum price that milk processors -- the companies that bottle milk or turn it into cheese and ice cream -- must pay farmers. The price fluctuates monthly based upon what butter, cheese and powdered milk sell for on commodity exchanges.
Retailers can set milk prices as high as they want, but state regulations prohibit them from selling milk below cost unless they can prove they are matching the price of a competitor.
Depending on the brand and how many cartons you want to purchase, you can pay anywhere from $2.70 to $6.99 for a single gallon of milk, and that’s just at one grocery store -- Ralphs.
It doesn’t stop there.
The Fresh & Easy Neighborhood Market chain was recently asking $2.99 for a gallon of fat-free milk and $3.18 for low-fat milk, but the price dropped to $3.08 for 2% and whole milk. It didn’t charge extra for low-fat milk when purchased in a half-gallon carton.
“It’s crazy,” said Elisa Odabashian, director of the West Coast office of Consumers Union. “There is no reason why you should pay 50% to 100% more for what is basically the same product. The farmers aren’t the ones getting the extra money. The retailers know that consumers just don’t shop around for milk.”
Consumers should pay attention in the dairy section, even if it just amounts to looking at the prices of the various brands where they shop, she said. It’s one of the easiest ways to trim a grocery bill.
Saving just a couple of dollars a week on milk adds up to enough money to purchase about two tanks of gasoline over the course of a year, Odabashian said.
Lots of stores -- not just supermarkets -- sell milk. You can find it in Rite Aid, Target, Wal-Mart, Costco and gas station mini-marts, and the prices can be all over the map.
There are more than a dozen stores selling milk on a four-mile stretch of Los Alamitos Boulevard from Seal Beach to Hawaiian Gardens. They include small Latino grocers, multiple big-chain drugstores, large supermarkets and an upscale Sprouts Farmers Market natural food store. The price can double, depending on where you shop and how much you buy.
Regardless of where it’s sold, most milk will be located in the back of the store, forcing people to pass by aisles of other merchandise on the way to the dairy case.
Most milk shoppers “just buy the brand they like and don’t pay much attention to what it costs. I will stand in the dairy section of a store and ask people why, and they just say because that’s what they like,” said Leslie Butler, a UC Davis agricultural economist and milk pricing authority.
Not Paul Curran, an insurance adjuster from Tustin who buys milk for a family of eight, including five children ages 3 to 14 and his mother-in-law.
“We get the brand that has the best deal,” said Curran, whose household drinks four gallons a week. His wife prefers Alta Dena brand milk, but he doesn’t buy it because “it’s twice the price” of store brands.
When Curran needs just a gallon, he’ll drop into Trader Joe’s or Rite Aid, where a single carton is less expensive than it is at a grocery store. But typically he buys two to four gallons at a time at a Stater Bros. supermarket to take advantage of the volume price break.
That’s an important tip, said Butler of UC Davis.
The California Department of Food and Agriculture also advises shoppers to always check the “sell by” date, which allows consumers to know how long milk will remain fresh. Retailers should not be selling any milk with an expired sell-by date. Shoppers should always buy the milk with the latest sell-by date so it has the longest possible shelf life.
Like Curran, Richard McDonough, a literary agent from Fullerton, doesn’t think much of brand-name milk. “I get nonfat milk from Trader Joe’s because the price for a half-gallon container is about a dollar difference for the same commodity sold at Ralphs, Gelson’s or Albertsons.”
Many moms will attest that buying the least expensive milk isn’t as easy as it might seem.
“My kids can tell from the other room what type of milk is in the cup,” said Lori Hoolihan, a south Orange County mother of three who has a PhD in nutrition and works as a dietitian for the Dairy Council of California.
“Nutritionally, all of these milks are the same. There is no difference between the 1% sold at Costco and the 1% sold at an Albertsons,” Hoolihan said.
But Hoolihan and other experts in the industry acknowledge that milk from different producers can differ in taste. They say it’s a result of many factors that include what the cows are fed, the pasteurization process, the temperature at which the milk is kept en route to the store and at the store, and whether it is in a plastic container or cardboard carton.
“It’s a lot of subtle things,” said Kelly Krug, a dairy expert and economist at the California Agriculture Department.
The combination of regulation and competition that governs milk prices doesn’t appear to make California milk any more expensive than milk sold in other states. Sales data from market tracker A.C. Nielsen in May showed that California shoppers on average paid $3.26 for a gallon of milk, according to the state Agriculture Department. That compares with a national average of $3.58.
Previously, some brands obtained higher prices by claiming that their milk came from cows that were not treated with artificial growth hormones, such as recombinant bovine somatotropin (rbST).
The hormones were used to increase the amount of milk a cow produced. Although food regulators have declared the hormone safe, it made some consumers nervous, and the practice has largely fallen out of favor in California.
The Ralphs and Vons store brands no longer have milk from cows treated with the hormone. Albertsons said it didn’t sell any brand of milk from cows treated with the hormone. Wal-Mart and Sam’s Club ended sales earlier this year.
California Dairies Inc., a giant Central Valley dairy co-op that produces about 40% of the state’s milk supply, phased out the use of a synthetic bovine growth hormone last year.
“Everyone noticed sales were better without it,” Butler of UC Davis said. Still, he cautioned consumers worried about the issue to check the brand they bought to see whether it states that the milk comes from cows not treated with a bovine growth hormone.
Californians get more for each dollar they spend on milk than most other Americans. That’s because the state’s standards are higher than what is required by other states and by federal regulations.
The nonfat and reduced-fat varieties of milk must be fortified with nonfat solids such as calcium, protein and assorted vitamins and minerals. Whole milk also requires a higher combination of fat and not-fat solids than the federal standards.
“On a cup-by-cup basis, there is more nutrition than what you would find in the rest of the country,” said Hoolihan of the Dairy Council.
The 1% milk sold in the state -- even if it is imported from a neighboring state -- has about a third more calcium and protein than federal standards.
“That’s why our milk tastes better,” Butler said.
California cows produced $7.3 billion worth of milk last year, or roughly 20% of the nation’s milk supply. Less than a third of that milk ever winds up in a glass or a bowl of cereal. Most goes to make butter, cheese and powdered milk for food production, Butler said.
Retail milk prices tend to rise quickly as the price of butter, cheese and milk powder goes up on the commodity exchanges. They fall slowly as the prices of those commodities decline, Butler said.
The price of milk isn’t something that Karen Cottrell of Long Beach follows very carefully. She is one of those shoppers who is wed to a milk brand -- Horizon organic -- even though it sells at a premium. Cottrell typically buys it at Ralphs, where it was going for $6.99 a gallon recently.
“I like Horizon milk. I like the flavor, and I think it is healthier,” Cottrell said as she walked into the Seal Beach Target store located in a shopping center with Ralphs. The price for Horizon at Target: $5.99.
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BEGIN TEXT OF INFOBOX
A glossary of milk terms
Grade A milk: Milk produced and processed under the strictest sanitary regulations. It is inspected and approved by public health authorities. In most markets, milk used in any products intended for consumption in fluid form must meet this inspection standard.
Grade B milk: Milk produced and processed under sanitary regulations that limit its use to cheese and other manufactured products.
Cream: Cream is the high-fat product separated from milk. It was first used by the Romans and was popularized by the Viennese. It contains not less than 18% milk fat.
Whole milk: In California, milk that contains not less than 3.5% fat and 8.7% not-fat solids, such as calcium and protein. Standards at the federal level and in other states vary.
Skim milk: Milk from which sufficient cream has been removed to reduce its fat content to not more than 0.2%. Like other milk, it contains protein, lactose, minerals and water-soluble vitamins but virtually no fat and only half as many calories as whole milk. It can also be called fat-free or nonfat milk.
Low-fat milk: Often used to describe any milk with 2% or less fat. In California, it describes a specific product -- milk that contains 1% fat and 11% not-fat solids, such as calcium and protein. Reduced-fat milk is the term that refers to 2% fat milk. (See next entry.)
Reduced-fat milk: In California, milk that contains 2% fat and 10% not-fat solids, such as calcium and protein. Standards at the federal level and in other states vary.
Chocolate milk: Made by adding chocolate or cocoa and sweetener to whole, reduced-fat, low-fat or fat-free milk.
Organic milk: Milk can be labeled “organic” if it comes from cows that have been exclusively fed organic feed, are kept in pens with adequate space, are allowed periodic access to the outdoors and direct sunlight, are not treated with synthetic hormones and are not given certain medications to treat illness. Organic and regular milk are nutritionally the same.
Lactose-reduced milk: A dairy product in which the milk sugar, lactose, has been broken down into two separate sugars, glucose and galactose. The process aids digestibility of dairy products, especially to consumers who may be lactose-intolerant.
Acidophilus milk: Another dairy product that is easier for lactose-intolerant people to digest, it is made by adding a live lactobacillus acidophilus bacterial culture to whole or reduced-fat milk after pasteurization. The bacteria produce lactase, an enzyme that breaks down milk sugar, or lactose, into simple sugars.
Raw milk: Farm milk that has not been treated in any way. Raw milk is not pasteurized, separated, standardized, fortified or homogenized. It sometimes contains bacteria that can cause illnesses. Raw milk is available for sale within California, but it can’t be imported from other states. Milk shipped between states is required by law to be pasteurized.
Homogenization: Treating milk to ensure breakup of fat globules. Homogenization prevents the cream portion of milk from separating from the skim portion. A test of adequate homogenization is that after 48 hours of storage at room temperature, no visible cream separation occurs on the milk.
Pasteurization: Under pasteurization, milk is heated to 160 to 175 degrees for 15 to 25 seconds to kill bacteria and other undesirable microorganisms. Ultra-high-temperature pasteurization is done at 275 to 280 degrees for about two seconds and extends the shelf life of milk beyond that of conventionally pasteurized milk.
Sources: California Department of Food and Agriculture, Dairy Council of California, Wisconsin Milk Marketing Board
Reporting by Times staff writer Jerry Hirsch
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