Milk prices could go up as much as 60 cents in March due to supply and demand issues. California's drought could push the prices up even higher later in the year and into early 2015.
Next month, shoppers at grocery stores all across the country will have to decide if the cost of milk is really worth it. Dairy analysts estimate store milk prices could go up 60 cents in March. If that happens, consumers will be paying more for milk than ever before.
Some of the blame can go to cheese production. Because of short supply, the cost went from $1.80 to $2.36 a block., according to dairy analysts. That jump is driving the March increases for "fluid milk."
In addition, this past year farmers had to cut back on growing their herds because of higher feed costs. Add that to China's increased demand, and what all of this becomes is a domino effect that inevitably gets passed on to the consumer.
Dairy analysts said the average price for milk was $3.50 in December. And this upcoming increase is likely going to last for a few months until dairy farmers find themselves in a better situation with their supply, according to dairyreporter.com. Supplies will increase after the new batch of calves are born and cows reach their peak milk production. Until then, you may have to be clipping coupons and looking out for deals.
California's drought is likely to add to the milk misery in the coming year. Without relief, production of alfalfa, the primary feed for cows, could be scaled back, which will affect supply and push prices up even further later this year and through early 2015.
Some consumers may get lucky, depending on the grocery store. Some stores may choose to eat the 30-cent increase in farm level milk prices, which happens from January through March. But in other areas, expect a 50 to 60 cent increase.