The rising dairy dilemma: Rising dairy prices are due to fuel costs, world demand for dairy

Jeff Broddle | Cadillac News Samantha Spitznas and sisters Cheyenne and Isabella drink milk with dinner recently. Osceola County MSU Extension educator Jerry Lindquist attributes the increasing dairy costs to world demand and fuel costs.

Mealtimes aren’t easy for Julie Gray.

With four daughters, ranging from 7 months to 10 years old, it can be a chore for the single mother.

In between mixing a special formula for her youngest daughter, pouring bowls of cereal, cleaning up and keeping peace between the girls, the Cadillac mother barely has time to get breakfast in for herself.

Dinner is no different.

Gray has to not only make the meal, but she has to make sure the girls eat and clean up.

One thing that is a constant, whether it is for breakfast, dinner or a snack, is a glass of milk. With a glass of milk at every meal and as a snack for the family of five, it is no surprise that the family goes through quite a bit of milk.

“We go through about a gallon of milk a day,” Gray said. “And Destiny is on a formula that is $25 a can. It really gets expensive.”

The price of milk has increased by about 25 percent in the last six months and other dairy product prices have been on the rise as well. That has not gone unnoticed by Gray. But with four growing daughters who love to drink milk, there is no way she would consider cutting back.

“You kind of have to bite the bullet — we need milk, there is no way around it,” she said. “The girls have a glass of milk with each meal and a lot of times they will want one for a snack.”

Why are dairy prices on the rise? There are two major factors, according to Osceola County MSU Extension educator Jerry Lindquist, those being the price of fuel and crude oil and the world demand for dairy products.

“There is a large demand put on corn because of the ethanol expansion taking off around the country,” Lindquist said. “That is causing all the feed prices to rise — especially grain, soybeans and other grain byproducts used to feed dairy cattle.”

Because those prices have almost doubled in price during the last year and a half, it has caused the cost of dairy products to rise as well, Lindquist said.

“A price increase can cause many other things to increase,” he said. “For instance, the cost of fertilizer has gone up because of fuel costs and some nitrogen fertilizers are made from natural gas.

“The increase in fuel costs also affects the farmers who drive tractors and the trucks that transport products.”

Another factor, which is the bigger of the two, is the world demand for dairy products. In the past year, many countries such as China, South America and Russia are buying more dairy products from the United States. Lindquist attributes this to a drought in New Zealand and Australia.

“Those countries produce a lot of dairy that is exported to other countries,” he said. “And with the U.S. dollar weaker, foreign countries can buy our products at a cheaper cost.”

Milk and other dairy products aren’t the only food products experiencing a jump in price. Lindquist said consumers have already started to see price increases in grain products and beef prices. Farmers are seeing a rise in artificial milk replacers, which are given to calves.

“It is hard to predict what will happen, but it is really a concern to the agricultural industry,” he said. “At some point, consumers may look for alternatives and will create a decreased demand.”

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With the cost of dairy on the rise, many people may find it difficult to afford milk, cheese and yogurt. Although that is the case, Mercy Hospital Cadillac dietitian Amber Voelker said dairy has vitamins and nutrients that a person needs for a healthy body. The following are ways to get these nutrients in other forms: