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Milk Prices Climb To Near Record Highs
Jerome, Idaho ( KMVT-TV / kTWT-TV ) Milk prices are reaching record levels across the nation. While milk prices are going up, the profit margins at dairies are still struggling.
"I think milk prices historically right now are some of the highest they've ever been. It's the cost of dairy that is so high," said Alan Stutzman with the Magic Valley Quality Milk Producers.
Factors such as drought, the heat wave, and politics are all playing a role in the high dairy prices. The high dairy prices mean high prices for consumers. With the higher prices, dairy producers are still struggling to see higher profit margins.
"A lot of the problems with the cost of dairy right now is based on bad government policy. In fact it's based on the ethanol solution. If we didn't burn 40% of our corn crop, we would have a lot lower cost of dairy and we would have a little bit better profit margin and it would probably help everyone all around," said Stutzman.
Many dairies across Southern Idaho are buckling down and changing their business practices. Locally though dairy producers have an advantage.
"With that being said we've got to remember that companies like Glanbia, Jerome Cheese, Darigold even some producers, local producers that created the Idaho Milk Products Plant, and also the High Desert Milk Plant, were all innovative and they built some markets already that helped the dairy pricing in this area. Chobani was just another piece of the puzzle that helped create more demand for the milk," said Stutzman.
Milk and dairy prices are expected to remain volatile through the summer.
"I can expect still some volatility but that isn't real reminiscent of what is going on in Idaho. Dairy prices are reflective of the supply and demand picture both domestically throughout the nation of the United States and now we are being affected by international prices also," said Stutzman.
The USDA is projecting that milk and dairy prices could decrease some by this fall.