Milk Pricing Fact Sheet

Jun 29, 2007, 01:00 ET from Midwest Dairy Association

    ST. PAUL, Minn., June 29 /PRNewswire-USNewswire/ -- The following is
 being issued by the Midwest Dairy Association:
     The price of milk can fluctuate due to changes in supply and demand,
 just like other grocery products and commodities. Farm-level milk prices
 are expected to go up in 2007, because the supply of milk is not keeping up
 with strong demand. However, dairy products are still one of the most cost-
 effective investments you can make for your family's health.
     Background information on dairy pricing:
     -- America's dairy farmers work hard every day to produce a nutritious,
        wholesome product.  Today the high prices farmers are paying for feed
        and fuel are putting tremendous pressure on dairy farm families.
        Unlike many other businesses, dairy farms cannot directly pass on their
        increasing production costs. Corn prices, as well as the price of
        soybeans and hay, have skyrocketed because of the growth of the ethanol
     -- Farmers do not set the price of milk.  Wholesale and retail prices are
        determined by market forces of supply and demand.  There is often a
        huge variance in the retail price of milk from store to store, and from
        city to city.  This is because of differing markups by supermarkets,
        mass merchandisers, C-stores and drug stores.
     -- While there are many factors that affect the price retailers charge for
        milk -- including processing, transportation and marketing costs --
        farmers receive less than 30 cents of every dollar consumers spend on
        dairy products.
     -- Dairy products remain a solid value for consumers.  Penny for penny, no
        other food offers as much nutritional value for America's families as
        milk.  While food budgets are tight for many people, dairy products
        remain an important staple ingredient for their great taste and
     -- Shoppers have stayed loyal to dairy, even during times of price
        fluctuations, due to dairy's excellent nutrition and great taste.
        Americans recognize the important role of dairy in their families'
        diets.  In 2004, retail prices nationwide increased an average of 19%,
        while fluid milk purchases declined less than 4%.  Since dairy is
        prevalent in almost every American home, changes in price can have an
        immediate impact.
     -- Dairy products offer one of the best values in the supermarket.  No
        other food offers as much great nutrition as milk -- including calcium
        and eight other essential nutrients -- all for just pennies per ounce.
     -- For your health, it's a good time to buy more delicious, nutritious
        dairy products.  Be sure to consume enough dairy as recommended by the
        U.S. government's Dietary Guidelines for Americans.
     -- The Dietary Guidelines recommends nutrient-rich foods, such as low-fat
        or fat-free milk or milk products, along with whole grains and fruits
        and vegetables, as food groups to encourage.  That means Americans need
        to enjoy more dairy.
     Midwest Dairy Association is a non-profit organization that provides
 consumers with information about the nutrition and wholesomeness of dairy
 foods, and conducts research and promotional programs. Programs are
 financed and directed by more than 13,000 dairy producers in nine states --
 Arkansas, Illinois, Iowa, Kansas, Minnesota, Missouri, North Dakota, South
 Dakota and eastern Oklahoma. For more information, visit

SOURCE Midwest Dairy Association