For all the talk about how expensive milk has become, the average price of a gallon of whole milk in the U.S. has only risen 4% over the past year — and a mere 1.4% since the beginning of 2021.
Although milk may have been in the news after an interview on CNN with one family was viral, it’s far from the American staple that has seen its prices soar most. This is fueling inflation fears across the country. Consider meat prices — boneless chuck roast has surged 28% in the last year — or average prices for a gallon of gas, which as of Thursday surged 61% from at the same time last year.
The U.S. retail price for a gallon has risen slightly over the last three years. There are many factors that point to further price hikes for milk. The U.S. has a declining number of milk cows, which is leading to a decline in production.
And help won’t be coming from abroad. StoneX’s director of dairy Nate Donnay said that the world’s major dairy producers, which include Australia, New Zealand, Europe, and New Zealand are suffering from dry periods. Over the past four years, global stockpiles have dropped in milk powder. This is a product that can be used to make a beverage and exported all over the globe.
A gallon of milk costs $3.59 on average, up 26% from July 2018, when it was at its lowest point.
Canada is also expected to see an increase in milk prices. The Canadian Dairy Commission, a government agency that controls prices and the nation’s output, said it will raise the prices paid to farmers on Feb. 1. A statement said that this would increase milk prices by 8.4%. It will also offset rising feed, energy, fertilizer and other costs.
Saputo Inc., Canada’s largest dairy processor, said it plans to hike its prices as a result.
Due to adverse weather and shipping problems in the major production areas, prices for many commodities this year are at multi-year highs. That’s help to push up food prices generally, fanning inflation fears. An UN gauge of food price is currently at 10 years high.