Consumers Expected To Pay More For Milk
Due to the price in fuel rising dramatically, dairy economists predict that milk prices will likely rise by almost $.30 cents a gallon. That 9% jump is also due to the high demand on dairy farmers for more milk production. Ms. Smith, of the USDA, commented that nutritonal and habitual concerns are high on their list due to this jump in price. When dairy prices rose in 2004, the consumption of dairy products dropped considerably. The USDA recommends that most Americans drink at least three cups of skim or low-fat milk a day, or the equivalent amount of cheese. "The price of milk swings by classic supply-and-demand economics. When prices dip, it makes it harder and more expensive for farmers to make milk," said Douglas Eberly, counsel for the Pennsylvania Milk Marketing Board. If the demand remains the same, or at a constant, whereas the supply for dairy drops, then the prices will increase. The President of the Professional Dairy Managers of Pennsylvania, Mr. Bower, stated that due to rising costs for farmers to produce more milk that it's highly unlikely that the rise in costs will assist them at all. Mr. Bower, "now pays about $180 a ton to feed 500 dairy cows, up from $115 a ton a year ago, an increase of more than 50%. The result is that domestic supplies of these milk protein products are limited and global market prices are rising that feeds back to the farm price of milk." So the question is, if the rise in dairy production does not benefit the consumer nor the producer, then what should the next step be, and is this one the right one?
5 comments:
Personally, I suppose milk as "nutritional and habitual" product that will not be affected by the rising of price. I would still have milk if the price went up, as long as the price is reasonable.However, in this case, the consumption did change significantly due to the change of price. I think the main reason is that there are so many substitutes nowadays.If the price of milk went up, then the comsumption of juice, which assumed to be a substitute of milk, went up. Therefore, I think the benefit actually goes to the substitues market of milk.
Price increases and demand decreases. People turn to substitutes as stated in the above comment. Then once the demand slims down the price starts to drop and the demand starts to rise. Seems like something I've learned in econ. I'm sure that if milk rises in price then demand will fall. Just like when the price of gasoline goes up. When gas goes down milk will be easier to produce and will let them lower the price.
With all the rumors I hear about what exactly is in our milk im starting to become hesistant to buy from a major brand. I've starting drinking organic milk. It's about $3.00 per half gallon, which isnt too bad. Tastes the same, it'll do for me.
With all the rumors I hear about what exactly is in our milk im starting to become hesistant to buy from a major brand. I've starting drinking organic milk. It's about $3.00 per half gallon, which isnt too bad. Tastes the same, it'll do for me.
If milk consumption drops so much when they raise the price then the dairy farmers need to realize the product they are selling is elastic and raising the price is going to cost them..
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