July 8, 2013
Soaring feed prices cause milk price increase in US
The Arizona Farm Bureau Federation''s figures show that average cost of a gallon of whole milk this past quarter was running US$3.07, 25% higher from the same period just three months earlier, brought about by the spike in the price of animal feed.
But Peggy Jo Goodfellow, the organisation''s marketing manager, said that big hike is more than offset by a decline in most of the other items in the typical market basket. The price tag for that is pegged at US$47.97, down from US$49.75 in the first quarter -- and US$3.22 less than the same period a year earlier for the same items.
Helping push down the bottom line are lower prices for meat, especially ham and bacon. Goodfellow says some of this is likely to grocery stores each trying to hang on to their share of the market.
"In Arizona, our retailers are very competitive," she said. Goodfellow said that seems to have been especially borne out in pork prices, with various markets all running specials during the time the Farm Bureau was doing its quarterly survey.
But Goodfellow cautioned that higher prices may be on the horizon, for the same reason that milk is now more expensive is the cost of feed. The only difference is timing.
"In dairy, it''s more of an immediate reaction to the feedprice, because dairy is a 24-hour cycle," she said. But the current higher cost of feed will not show up in meat prices until later, when the animals go to market.
That presents an opportunity for those who have large freezers and can shop at the current discounts, especially for pork and even chicken which has come down in price. Milk isn''t the only thing that''s going to take a bigger bite out of consumer''s wallets.
The quarterly survey is based on what federation shoppers found at markets around the state. These prices do not reflect use of coupons or the affinity cards that many supermarket chains provide which give holders additional discounts.