Retail Milk Prices Expected to Increase

Consumers in California can expect to pay a little more for milk beginning next week when the state raises the wholesale price of milk by 4 cents a gallon.

Although the state does not regulate retail prices, a jump in the price paid to farmers typically translates to a similar or slightly larger increase in supermarket dairy prices, state officials say.

Californians had gotten a break in April, when wholesale prices plunged 50 cents a gallon to an average of $1.22 in response to an increase in the supply of dairy products.

But as demand for butter and cheese has swelled, wholesale prices have inched upward.

In August and September, farmers will receive an average of $1.28 a gallon for their milk, according to state Department of Food and Agriculture officials.

The state adjusts the minimum price for milk every two months using a formula based on commodity trading.

Activists such as Consumers Union in San Francisco and Mad About Milk, a trade group that includes out-of-state dairies trying to enter California, complain that these prices are among the highest in the nation despite California’s status as the No. 1 fluid milk producer nationally.

The average retail price for a gallon of milk declined to $2.23 in April, the last month for which data were available, according to a state survey.

State Sen. Jackie Speier (D-Daly City) introduced legislation last year trying to repeal California’s 20-year-old law that prevents stores from selling milk below cost to get customers into their stores.

Massive opposition from the dairy industry killed the bill. But it has since been amended and reintroduced in both houses of the Assembly.

The new bill, which has made it out of the Senate Agriculture and Water Resources Committee, would require state officials to compile the milk prices of 180 retailers around the state each month for consumers to access on the Internet or via an 800 number.