Terry Etherton
Retail food prices at the supermarket increased in the first quarter of 2008, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 basic grocery items in the first quarter of 2008 was $45.03, up about 8 percent or $3.42 from the fourth quarter of 2007.
For the first quarter of 2008, shoppers reported the average price for a half-gallon of regular whole milk was $2.40, up 2 cents from the prior quarter. The average price for one gallon of regular whole milk was $3.81, down 10 cents. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 20 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.
Compared to the first quarter of 2007, retail prices for regular milk in gallon and half-gallon containers rose 10 percent and 8 percent respectively during the first quarter of 2008. The average retail price for rbST-free milk rose about 10 percent as well. The average retail price for organic milk in half-gallon containers went up and down slightly over the year, and was 2 cents higher in the first quarter of 2008 compared to a year ago.
The Smoke and Mirrors of Milk Marketing
Is this Ever Going to Stop?
Nothing has changed since 2006 with respect to the fact that dairy farmers’ freedom to operate, and use a safe and effective biotechnology (rbST) has been continually under attack. The smoke and mirrors marketing campaign continues to roll on and on and on!
I have been writing about how dairy farmers who use rbST are getting cheated for a long time.
In a nutshell, some dairy processors and retailers have been willing to use deceptive labeling campaigns to exploit consumer ignorance, and raise the suspicion that some milk (i.e., organic or rbST-free) might be safer or healthier than other milk (i.e, conventional), and charge a whole lot more!
Oh, almost forgot…consumers who purchase rbST-free milk or organic milk pay for more the SAME milk, too (see the Table below)!
This is nonsense! There is no scientific evidence that there is any difference among conventional, rbST-free or organic milk, other than the price!
What an outrage!
What a legacy the practitioners of this deception (i.e., some milk retailers, processors and cooperatives) have built!
How Much Money is Being Made?
The extent of the “stealing your milk money” campaign is illustrated in the Table below (data from the latest American Farm Bureau Federation Marketbasket Survey).
The average price for a half-gallon of rbST-free milk is $3.30, up 24 cents from the last quarter or nearly 40 percent higher than the reported retail price for a half-gallon of regular milk ($2.40)!
The markup between conventional and rbST-free milk is 90 cents per half-gallon based on the price data for the 1st quarter of 2008! On a hundredweight (cwt) basis (which is how milk is sold from the farm), this represents a markup of $20.88 per cwt for rbST-free milk at retail!
The unfortunate reality is that none of this profit is being shared with hard-working dairy farmers, and the use of a safe and effective biotechnology, rbST, has attacked by Luddites and, sadly, by more than a few in the dairy industry.
Retail Milk Prices
