Are dairy products cost sustaintable at current levels

[Tom_Tildrum]

Washington DC area: $3-4.

[Ruken]

@puddleglum

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.

It’s still strong but falling, so that may reverse the trend.

Anyone know how common it is to use milk as a loss leader? Store price may not correlate with dairy price.

The very first link when I search for:
cost of milk production
Is a 2015 report from UIUC that states:

The average net price received per 100
pounds of milk was $17.35, which was less
than total economic costs of $19.17. The
price received for milk in 2015 was the
lowest since 2010. On a per cow basis, total
returns from milk were $4,053 compared to
the total cost to produce milk of $4,463 per
cow. Total returns from milk per cow were
the lowest since 2010 after 2014 being the
highest on record at $5,730. The net returns
per cow in 2015 were a negative $410.
Total returns have exceeded total economic
costs two out of the last ten years.

[Ruken]

More random googling tells me a gallon of milk weighs 8.6 pounds, más o menos. So $17.35 and $19.17 per 100 lb are $1.49 and $1.65 per gallon, respectively. Again, that’s at the dairy, not retail.

[DinoR]

After I had posted I remembered the retail price of milk is one of the things in the basket of goods the Bureau of Labor statistics tracks to determine the Consumer Price Index. I then promptly forgot till this popped back up:p

BLS’s average retail price in the US, by month, from 2007 to 2017 for Milk, fresh, whole, fortified, per gal. (3.8 lit)

For July 2017 the average price was $3.219.

[glowacks]

Milk goes on sale here for $2 a gallon. I don’t know what it normally costs, because I always get 2 gallons a week regardless of what it costs, and only notice the ads on the front page of the flyer to know what it is on sale. I can tell you though that right now it’s a better deal to get a dozen eggs ($1.09) rather than 18($1.99), which is ludicrous, but it’s something I check whenever I get eggs because it goes back and forth. I highly doubt it is ever better to buy milk in half-gallon increments; when I worked in the dairy department, smaller containers of milk were ridiculously more expensive, likely because anyone buying something smaller than a gallon is only going to be using that amount before it goes bad, and so they can charge far more per unit, not caring about losing the sale to a larger size.

[Wesley_Clark]

@Ruken

More random googling tells me a gallon of milk weighs 8.6 pounds, más o menos. So $17.35 and $19.17 per 100 lb are $1.49 and $1.65 per gallon, respectively. Again, that’s at the dairy, not retail.

I checked Kroger yesterday and they are $1.19 a gallon. I have no idea how they sell it like that at retail. I thought those were national prices.

[Ruken]

@Wesley_Clark

I checked Kroger yesterday and they are $1.19 a gallon. I have no idea how they sell it like that at retail. I thought those were national prices.

My understanding is that milk is a common loss leader, although I do not have a good citation for how common this is or how much of a loss they’re willing to take to get you into the store. For whatever reason people remember milk prices (cite: the posters who can’t resist sharing anecdotes in this thread). And that may influence store choice.

[jacobsta811]

@pulykamell

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.

You don’t have to go too far - Walmart, Sams Club, and Costco Stores were all selling milk for less than $1.50 a gallon (and often <$1 gallon) in the Peoria, IL metro area before I moved out last month. Most other grocery stores such as Kroger were less than $2/gallon. Convenience stores were YMMV as some of those always sold milk for several dollars a gallon more than grocery stores even when walmart was $2-3 a gallon.

[Procrustus]

@Daylate

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.

I know nothing about the dairy industry, but I do know Bellingham is only about 20 miles from the boarder and 55 miles from Vancouver.

[Wesley_Clark]

@Ruken

My understanding is that milk is a common loss leader, although I do not have a good citation for how common this is or how much of a loss they’re willing to take to get you into the store. For whatever reason people remember milk prices (cite: the posters who can’t resist sharing anecdotes in this thread). And that may influence store choice.

Yeah but it wasn’t like this a year or two ago, milk was closer to 2-3 a gallon where I live.

Also Aldi, Kroger and Walmart all have milk around $1-1.50 a gallon. I don’t know if they are all loss leaders. And this is multiple stores in Indiana, several in indianapolis and stores in smaller towns around the state.

I just bought a gallon on my lunch break. I went to dollar general since I didn’t want to drive to the grocery store, and it was $1.95. however dollar general perishable groceries are
more expensive than a grocery store, and they only sell name brand milk, no store brand. But despite that, it still cost me less than other people in this thread are paying for generic brand milk at grocery stores.