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Published: Thursday, 5/17/2007

Milk drinkers face prospect of 10% boost

BY HOMER BRICKEY
BLADESENIOR BUSINESS WRITER
Gallons of milk at Bassett's Market in Perrysburg range in price from $3.19 to $3.29; prices as high as $3.70 are predicted by the end of the year. ohio state university Increasing costs for corn, a feed staple for dairy cattle, are contributing to the rising price of milk. Gallons of milk at Bassett's Market in Perrysburg range in price from $3.19 to $3.29; prices as high as $3.70 are predicted by the end of the year. ohio state university Increasing costs for corn, a feed staple for dairy cattle, are contributing to the rising price of milk.
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If oil is "black gold," milk may be the "other white gold" - not quite as valuable ounce for ounce as jewelry but getting quite expensive.

The price of milk has risen sharply in recent months, and retailers and dairy-industry experts say prices could go up another 10 percent this year.

That could mean milk in the Toledo area would jump from a typical range of $3 to $3.30 a gallon to $3.50 to $3.70.

On average, a gallon of milk cost about the same as a gallon of gas in the area.

Among the reasons for the increasing milk price are higher costs for shipping, global demand for protein byproducts from milk, and greater production of ethanol, an alternative fuel made from corn, the major component of cattle feed.

At Kazmaier's 5-Star Markets in Perrysburg and Maumee, milk had sold for nearly $3 a gallon but yesterday it was on sale for $1.99.

"That's a heck of a price," said owner Allen Kazmaier II. But he said the price likely will switch to about $3.25 next week and to $3.69 a gallon by July.

His Perrysburg store did a booming business in the milk aisle because of the special.

But area stores seem to have specials less frequently than they did a year or two ago.

"I know things have gone sky high," said Paul Jaros, of Rossford, who was buying milk. "I'm a cost-conscious person," said the letter carrier for the East Toledo post office branch.

Steve Horvath, of Rossford, loaded four gallons into hiscart and said, "My three kids go through milk like water."

Nearby at the Bassett's Market in Perrysburg, some customers were philosophical about paying $3.19 to $3.29 a gallon for milk.

Judy Verkin, of Perrysburg, said she fears that for some consumers' spending decisions it may come down to a choice of "putting it on cereal or putting it in the gas tank."

Jamie Casey, a dairy stocker and cashier at the store, said he hasn't heard many complaints about the milk price.

At Kroger stores, the price was $3.15 a gallon, but the chain had a special on half-gallons, six for $8, or $1.33 each. And at Giant Eagle, prices were $2.99 to $3.29 a gallon, depending on brand.

Local prices are somewhat below the national average, which has topped $3.30 in rewhich has topped $3.30 in recent months, according to U.S. Department of Agriculture. It has hit $4 in New Orleans.

Dianne Shoemaker, dairy specialist for Ohio State University Extension, said demand for whey products used as ingredients in many foods is spurring the increase, along with the higher prices for corn.

She expects milk prices to be "very strong" for the rest of the year.

Dairy farmers last year received $12.50 per hundred pounds of raw milk, which translated into a price of about $1 a gallon, but in recent months that price is more than $15, or about $1.25 a gallon, she said.

Agricultural economists at Penn State University recently predicted farm-level prices will hit a record this year - topping $20 per hundred pounds, or about $1.60 a gallon. The prices of other dairy products, including cheese, yogurt, and ice cream, also have climbed.

Contact Homer Brickey at:

homerbrickey@theblade.com

or 419-724-6129.



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