# Are dairy products cost sustaintable at current levels **URL:** \ **Category:** Factual Questions\ **Created:** [August 12, 2017, 10:15pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470 "2017-08-12T22:15:44Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 12, 2017, 10:15pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/1 "2017-08-12T22:15:44Z")
Milk is roughly $1 a gallon where I live and has been for at least a year or so. I remember 20 years ago it was $3 a gallon. My understanding is that there was a shortage of dairy several years ago, which caused a lot of investment in production and now they are at high capacity, maybe overcapacity. Is milk profitable at the current prices, or is production going to start shutting down if it continues to sell at around $1-1.50 a gallon and prices go back up to $2-3 a gallon? ---
**Author:** ![voltaire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voltaire/32/313_2.png) [@voltaire](https://boards.straightdope.com/u/voltaire)\ **Post date:** [August 12, 2017, 10:22pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/2 "2017-08-12T22:22:03Z")
Damn, it’s ~$3 for a HALF gallon here! ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 12, 2017, 10:34pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/3 "2017-08-12T22:34:12Z")
Where are you? I’m in the midwest of the US, it generally goes for about $1.20 a gallon, maybe $0.69 a half gallon. The lowest I’ve seen is $0.84 a gallon, and it isn’t uncommon for prices to drop to about $1 even a gallon. ---
**Author:** ![Darren\_Garrison](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/darren_garrison/32/92_2.png) [@Darren\_Garrison](https://boards.straightdope.com/u/Darren_Garrison)\ **Post date:** [August 12, 2017, 10:43pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/4 "2017-08-12T22:43:22Z")
3ish bucks a gallon here. ---
**Author:** ![Kron](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kron/32/12444_2.png) [@Kron](https://boards.straightdope.com/u/Kron)\ **Post date:** [August 12, 2017, 10:57pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/5 "2017-08-12T22:57:53Z")
I think I paid 3.29 today. ---
**Author:** ![nightshadea](https://avatars.discourse-cdn.com/v4/letter/n/7ba0ec/32.png) [@nightshadea](https://boards.straightdope.com/u/nightshadea)\ **Post date:** [August 12, 2017, 10:59pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/6 "2017-08-12T22:59:48Z")
here in ca milk is subsidized by the state and fed government … so its hard to say…but about 4 25 for two gallons (which is placed in a box) ---
**Author:** ![PoppaSan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/poppasan/32/189_2.png) [@PoppaSan](https://boards.straightdope.com/u/PoppaSan)\ **Post date:** [August 12, 2017, 11:48pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/7 "2017-08-12T23:48:02Z")
> [@Wesley\_Clark](#): > > Where are you?\*\* I’m in the midwest of the US\*\*, it generally goes for about $1.20 a gallon, maybe $0.69 a half gallon. > > The lowest I’ve seen is $0.84 a gallon, and it isn’t uncommon for prices to drop to about $1 even a gallon. **mine** Really? So am I and recently the only times I’ve seen it under $2/gallon is with a $10 separate purchase … limit 2. And that is like for $1.99. Normally it is in the $2.30-3.25 range depending on % and store. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [August 13, 2017, 12:02am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/8 "2017-08-13T00:02:50Z")
Prices aren’t like this everywhere else? I assumed our local prices tracked national prices. These are the prices for various stores in various cities I’ve seen in Indiana. I think walmart generic brand milk was $1.29 today. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [August 13, 2017, 1:15am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/9 "2017-08-13T01:15:44Z")
> [@Wesley\_Clark](#): > > Milk is roughly $1 a gallon where I live and has been for at least a year or so. For whole milk? I wish. Living in Ioway, and it’s routinely 3.x a gallon. Now eggs, they have been inexpensive lately, .90c a dozen, for “extra large”. ---
**Author:** ![Mrdeals](https://avatars.discourse-cdn.com/v4/letter/m/ea666f/32.png) [@Mrdeals](https://boards.straightdope.com/u/Mrdeals)\ **Post date:** [August 13, 2017, 1:29am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/10 "2017-08-13T01:29:57Z")
I’m in Wisconsin (dairy country), i purchase 200-300 gallons a week for my store and it costs me $1.97 wholesale…Although i carry the name-brand milk. Generic can get down to around the $1.50/gal range. ---
**Author:** ![Flyer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/flyer/32/7298_2.png) [@Flyer](https://boards.straightdope.com/u/Flyer)\ **Post date:** [August 13, 2017, 1:37am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/11 "2017-08-13T01:37:26Z")
> [@Common\_Tater](#): > > For whole milk? I wish. Living in Ioway, and it’s routinely 3.x a gallon. Now eggs, they have been inexpensive lately, .90c a dozen, for “extra large”. How do you get the tenth of a penny in change? ---
**Author:** ![Daylate](https://avatars.discourse-cdn.com/v4/letter/d/9dc877/32.png) [@Daylate](https://boards.straightdope.com/u/Daylate)\ **Post date:** [August 13, 2017, 2:59am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/12 "2017-08-13T02:59:07Z")
Here in the great Pacific Northwest, we get a ton of Canadians coming down to our supermarkets and stocking up on gallons and gallons of milk. It costs them about half as much as it does in Canada. Then, on the way home they fill up with gasoline which is also a lot cheaper down here. I once drove past a big mall just north of Bellingham, and got to counting license plates. Out of 24 cars, 23 were from British Columbia and one lonely soul from Washington. And Bellingham is about 70 or so miles south of the Canadian border. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [August 13, 2017, 3:06am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/13 "2017-08-13T03:06:06Z")
> [@Wesley\_Clark](#): > > Where are you? I’m in the midwest of the US, it generally goes for about $1.20 a gallon, maybe $0.69 a half gallon. > > The lowest I’ve seen is $0.84 a gallon, and it isn’t uncommon for prices to drop to about $1 even a gallon. Where in the Midwest are you getting it that cheap? Around $2.50 a gallon is the cheapest I’ve ever seen it. I know I’m in Chicago, but I generally know where to find things cheap. I’m in the Quad Cities on the Iowa-Illinois border right now, and I paid two and change for a half gallon of store brand milk today. ---
**Author:** ![DinoR](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dinor/32/2821_2.png) [@DinoR](https://boards.straightdope.com/u/DinoR)\ **Post date:** [August 13, 2017, 3:32am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/14 "2017-08-13T03:32:10Z")
> [@Wesley\_Clark](#): > > Is milk profitable at the current prices, or is production going to start shutting down if it continues to sell at around $1-1.50 a gallon and prices go back up to $2-3 a gallon? It is important to note that it might not be profitable. Milk is a common loss leader, selling below cost, to try and get people in the door. ---
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [August 13, 2017, 12:14pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/15 "2017-08-13T12:14:06Z")
> [@Wesley\_Clark](#): > > Prices aren’t like this everywhere else? I assumed our local prices tracked national prices. Pretty obviously not that low nationally. In Northern Ohio we pay $1.99-$2.99/gal. Never been any cheaper unless a super weeklong sale as a loss leader. But NEVER even near $1. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [August 13, 2017, 11:30pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/16 "2017-08-13T23:30:42Z")
Of course, after my last post, I went to Meijer in Bolingbrook, a suburb of Chicago, and they had milk at $1.69 a gallon prominently advertised. It was obviously a loss leader, as the usual inexpensive brand (Dean’s) of non-organic milk was $4.29 a gallon. ---
**Author:** ![Elemenopy](https://avatars.discourse-cdn.com/v4/letter/e/b5e925/32.png) [@Elemenopy](https://boards.straightdope.com/u/Elemenopy)\ **Post date:** [August 14, 2017, 6:38am UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/17 "2017-08-14T06:38:07Z")
> [@Wesley\_Clark](#): > > Milk is roughly $1 a gallon where I live and has been for at least a year or so. I remember 20 years ago it was $3 a gallon. > > My understanding is that there was a shortage of dairy several years ago, which caused a lot of investment in production and now they are at high capacity, maybe overcapacity. > > Is milk profitable at the current prices, or is production going to start shutting down if it continues to sell at around $1-1.50 a gallon and prices go back up to $2-3 a gallon? You might just live near a big commodity dairy or something. I live in Indiana and usually pay about $3/gallon for ordinary whole milk. Maybe a few cents less at Aldi or Walmart. ---
**Author:** ![Orwell](https://avatars.discourse-cdn.com/v4/letter/o/dfb087/32.png) [@Orwell](https://boards.straightdope.com/u/Orwell)\ **Post date:** [August 14, 2017, 1:07pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/18 "2017-08-14T13:07:23Z")
I live in PA, which is a big dairy state. But we still pay over $3.00 a gallon everywhere. As with most of the ag industry, there are price supports, surplus purchasing and all sorts of government subsidies in the dairy industry. But to answer the original question, there is no doubt that the cost of production and distribution is far higher than $1.00 a gallon. Based on what I could find quickly, the cost of production is at least $2.00 a gallon, before adding in transportation and distribution. If subsidies weren’t involved, farmers would cut production because they are losing money at that price. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [August 14, 2017, 1:26pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/19 "2017-08-14T13:26:06Z")
$1/Gall ? It has been decades since milk was that cheap around here. I can’t remember ever paying that little. I am in the deep south and $3/gall would be a good price here. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [August 14, 2017, 2:21pm UTC](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470/20 "2017-08-14T14:21:41Z")
> [@Orwell](#): > > I live in PA, which is a big dairy state. But we still pay over $3.00 a gallon everywhere. As with most of the ag industry, there are price supports, surplus purchasing and all sorts of government subsidies in the dairy industry. > > But to answer the original question, there is no doubt that the cost of production and distribution is far higher than $1.00 a gallon. Based on what I could find quickly, the cost of production is at least $2.00 a gallon, before adding in transportation and distribution. If subsidies weren’t involved, farmers would cut production because they are losing money at that price. In PA there is a minimum price that all retailers of milk must charge and it is illegal to sell below that price. Farmers almost never cut production of milk because the federal government will buy milk at a certain price to make into butter and cheese. This minimum price assures that farmers can sell their products at a profit despite what the market for milk is. This cheese is then stored in huge caves. From my reading the strong dollar is causing a surplus of milk recently as exports go down. But my guess is that prices as low as mentioned in the OP are more likely to be caused by price wars at the retail level than any change in the market for milk at the wholesale level. [Next page](https://boards.straightdope.com/t/are-dairy-products-cost-sustaintable-at-current-levels/793470.md?page=2)