What's Behind Milk Price Hike?

In local stores, the price for a gallon of milk can range anywhere from $3.29 per gallon to as high as about $4.19. Why the increase?

Newton County dairy farmer Jo Ann Nicholson says she thinks she knows at least part of the answer.

"The information we're getting is that the Atkins diet has helped us," Nicholson said. "Cheese is a good source of protein. And butter, they're finding out now that it's not the villain they thought it would be."

While diet trends such as the Atkins diet have helped, Victor Lee with the Newton County Extension Service, says other factors are also playing a role.

This includes the decrease in the number of dairy farmers and the increased price in cheese and butter, two items, which help to regulate the price for milk.

So, who's gaining most from the price hike? Officials say, since the industry is regulated by the federal government, really no one.

"I was looking at a report on gas prices and they say florists are adding on to their bill 68 cents to cover the cost of gas," Nicholson said. "We can't do that. We milk that cow and a month later we get a check they give us. That's just what we get. If they think back, today they haven't paid much over $3 a gallon for milk for a very long time."

"The last three or four years, farmers have been getting the same thing for milk that they got 20 years ago," Lee said. "Their feed, energy costs, you name it, all of their energy costs have gone up but the price of milk has remained pretty much stagnant. You know I'm not the sharpest knife in the drawer but even I could figure that one. They're farming off of equity."

Officials say it's living off of the equity that has hurt dairy farmers including many locally. Exactly how much will be the subject of Part 2 in our series.