Utah shoppers can expect to see the price of milk increase by at least 5 to 10 cents a gallon next week, according to Utah Dairy Commission officials.
The prices of butter, cream, cheese and ice cream are bound to go up in local stores, too, dairy officials said.Utah Dairy Commission spokesman Clint Warby said Friday that the drought in the Midwest and other parts of the nation is responsible for the price increase.
He said milk producers around the country, who are having to pay higher prices for hay, grain and feed supplements because of the drought, will be getting more money for their milk in October, and the increase is being passed on to consumers.
"I expect Utah dairymen will be getting an increase of 46 cents per 100 pounds of milk. The increase may save some Utah dairy farmers who would otherwise be forced out of business because of record high production costs."
Warby said Utah has lost 20 percent of its dairy farmers in the past few years because of the high cost of farming, coupled with low earnings. Utah only has 800 dairy herds now and about 74,000 dairy cows.
He said the price of milk is determined by the federal government, which uses a formula based on the prices 150 milk processors in Minnesota and Wisconsin pay for raw milk used to make cheese, butter and powdered milk.
"The 46 cents per hundredweight price increase is simply the result of the most recent survey of these milk processors, which the government and dairymen call the M&W price (for Minnesota and Wisconsin).
"Consumers are presently paying so low a price for milk that the small increase should not be of any real concern. Milk prices have been in a downward spiral for years and reached a low of $10.90 per hundredweight of grade A milk in June, the lowest price in the past 10 years. The average price of 2 percent milk is $1.72 in Utah, as low a price as we've seen in the past three or four years."
"Prices got so low they had no place left to go but up," he said.
Even if retail milk prices rise 10 cents, a gallon of 2 percent milk will still cost less than consumers paid in 1983, he said - an average of $1.88 a gallon.