Why Buy the Cow: Cheap Milk Prices, Falling Milk Prices & Friendly Farms

Got milk? If you've bought milk lately, you may have noticed that milk prices have been falling lower and lower over the last six months. If you shop exclusively at Stop and Shop or other larger grocery stores, you're probably paying $3.50 a gallon without batting an eye, but stop by your local Price Rite or Aldi's, and you'll find milk at $1.99 a gallon or lower. How can milk at one grocery store have such a significant price different than milk at another grocery store? Is the cheaper milk a lower quality? What's up with milk prices in New England or around the country, for that matter?

On Yahoo! Answers, Brian from Massachusetts complained 6 months ago that milk was so cheap at $2.30 a gallon that he found himself drinking 4 cups a day just to use it up. Although the best answer to that question was the one that argued that spring time calf production equaled lower milk prices in the spring, that answer can't possibly be true for milk in October.

Low milk prices are spelling disaster for the dairy industry, says an article in today's Dairy Daze: "Milk prices were good in 2008, but they were offset by fuel prices that were up 35 percent that year, feed prices 26 percent and fertilizer prices that had doubled, according the annual report by the UW-Madison Department of Agricultural and Applied Economics and UW-Extension." Economic downturns can take a while to realize their full impact, and this is one of those cases.

In an August story for NPR's All Things Considered, John Burnett suggested that the prices of milk were unduly influenced by large milk producers putting the squeeze on small-time farmers: "As the dairy industry concentrates into fewer and fewer players, some farmers complain it's killing off independents and reducing options for consumers who want to buy locally." Considering that the main competitor mentioned in the story, Dean Foods, controls 80% of the milk market in Massachusetts, it's not unreasonable to think that the same thing is happening in Rhode Island. Are the cheap milks prices a result of a few big corporations trying to put all the little guys out of business?

Christie Hurd, of Edible Antics, a blog based in Wisconsin, seems to think so: "Wholesale milk prices are so low that dairy farmers are currently losing about $100 per cow every month." That's because cows are massive creatures who require a lot of food to fill those four stomachs.

(Every seen a cow up close and personal? Those beasts are scary in their dumb willingness to follow you around. Seriously. I grew up next door to a dairy farm, and the whole herd would follow me each morning as I took a walk around the field. Freaky. So why should I, as a consumer care about milk prices in Wisconsin? Because the milk I just bought at Aldi's so cheerfully labeled, "Friendly Farms," may very well have come from Wisconsin. Or Illinois. Or Indiana. Or Iowa. Or any other state, really, as long as the price of the milk was right.

It's not like Friendly Farms is a real farm out in the middle of the country filled with happy dumb cows, cute little goats, and annoying-as-hell chickens; Friendly Farms is a label for milk that comes from any one of a number of farms. Good luck even trying to find a phone number for Aldi's Friendly Farms. That's because there isn't one. The truth is that Friendly Farms milk is the same milk as the expensive stuff, but Aldi's paid to have their label added to the bottle. That's how all of Aldi's food is, and quite likely the way a lot of other grocery stores run things, too.

(Freaked out by Friendly Farms? You sure will be after you read this blog post and reader's comments about Aldi's and the not-so-friendly Friendly Farms label on Jeremy's Journal.)

It's not like dairy farmers have many options when it comes to selling their milk: they've got the milk, and they have to sell it. (Well, unless they live in Belgium, that is. Then they might spill it in protest of the low prices. Don't cry over spilled milk and all that.)

When the prices are too low, dairy farmers can only hope the market will change. They'll have to start killing off cows if it doesn't. I hope you like hamburgers:

"Dairy farmers say they have little choice but to sell part of their herds for slaughter because they face a perfect storm of destructive economic forces. At home, feed prices are rising and cash-strapped consumers are eating out less often. Abroad, the global recession has cut into demand for butter and cheese exported from the U.S." (Tracie Cone for AP Online)

The global recession and decreased demand for milk is also discussed in this video from Fox Business: Milk Prices At Lowest Level in 30 Years.

It doesn't exactly make sense, does it? Wouldn't you think that lower prices for milk producers would equate to higher prices for the consumer? Sure, in a perfect economy, milk prices might work that way, but you already knew that our economy was fucked, right? For one thing, most of us aren't buying our milk directly from the farmers. We buy our milk in grocery stores, like Aldi's or Stop 'n shop, and most of us never see farmers up close and all personal like. We probably never think about the farmers very much at all.

But if milk is only $1.75 a gallon, a good $2 cheaper than it was, say, six months to a year ago, someone's getting hurt, and it's not exactly the consumer is it? Nope, we get cheap milk, so Brian from Massachusetts is the only person complaining about it. Most of us don't even think too much about the prices except to say, "Hey, that's cheap!" But we, as consumers, should be thinking about that. I mean, if I paid $1.75 for my milk, how much of that could possibly be going back to the farmer? $1? Yeah right. 50 cents? Maybe.

So do I stop buying milk? I probably should, actually, since this article doesn't even consider what's being fed to the cows that produced the milk, the evils of factory farms, or the fact that most adults can't digest milk anyway. But maybe a better answer is to buy locally produced milk exclusively, even if it costs more. Whole Foods is a great place to buy locally-sourced milk products and with a little bit of research, you can surely find a place near you. You might find yourself paying a couple extra bucks, but in the great scheme of things, it's definitely worth the extra cost.

What do you think?