Got Milk? Prices drop for drinkers |

Got Milk? Prices drop for drinkers

Retail milk prices in the Golden State have trickled down in recent months, spilling into Nevada and raising a dilemma between consumers and dairy farmers.

Consumers are swimming in the savings, amounting to $50 million, according to the California Department of Food and Agriculture. Dairy farmers, however, are concerned over what the future holds in this fluid industry.

In the past few months, prices for a gallon of milk in California have been averaging 6 to 18 cents less than they were at this time last year, the state agriculture department reported.

At Raley’s at the “Y” in South Lake Tahoe, a half gallon of Sunnyside whole milk costs $1.99. The same quantity of Lucerne milk at Safeway sells for $2.11. The Albertsons brand goes for $2.03.

The lowest prices in two decades have prompted an industry association representing farmers to ask state regulators for an emergency increase in wholesale prices.

A proposal by the Western United Dairymen will be reviewed Jan. 12 by the agriculture department during a public hearing set in the state’s Sacramento office auditorium on N Street. A workshop will be held Dec. 21 to discuss the proposal in Room 102.

Farmers want the state to set the minimum price paid to dairies for milk used to make butter and cheese at either the going market rate or the amount established by Congress as the national support price, whichever is higher, Western United’s Chief Executive Officer Mike Marsh said.

The support price is used by the federal government to buy milk during times of oversupply. It’s part of a safety net designed to protect farmers from volatility in the market by helping to drive prices upward during the industry’s periodic gluts.

Because of the current glut, the market price has been hovering around $8.40 per pound of butter and cheese milk – the lowest price farmers have endured since the mid-1970s.

California’s 2,100 dairymen produce 32 billion pounds of milk from 1.4 million cows last year – nearly 20 percent of total U.S. milk production. They fear if the price drops to the predicted level, many will begin to slip into bankruptcy or be forced to sell out to larger, corporate farms like those found in the Central Valley.

In Nevada’s Carson Valley, the number of dairy farms makes the hard way of life and shakeup in the industry food chain more evident. At least a dozen farms used to flourish in the region, and now one or two at the most make a living milking cows.

“When prices go down, it’s not easy,” said Chris Hellwinkel, who has operated a third-generation dairy farm in Gardnerville since 1980. “You’ve got to love it. If you don’t, you better not even get into it.”

Hellwinkel’s Sierra Vista Dairy Farm of 150 cows pumps out 7.5 gallons a day per cow for which he gets a little over $1 a gallon. The market rate teetered at about $1.45 a gallon this time last year.

“This really adds up,” he said.

The saving grace for Hellwinkel has been low production costs, with the price of grain much lower than usual.

“Agriculture, in general, is going through a big slump. There’s not hardly an area (of business) we can point to that’s doing well,” Hellwinkel said.

California’s agriculture economist Tom Gossard feels he’s in a no-win situation, lately fielding many complaints from unhappy farmers.

“When milk prices go down, farmers call. When they go up, consumers call,” Gossard said.

Government programs like WIC – Women, Infants and Children – buy milk in bulk as a staple food to feed low-income Americans.

“If the price of any commodity goes up, they end up buying less,” Gossard said of the social implications.

Brenda Cormack of South Lake Tahoe said she barely notices the price of milk because she and her husband would drink it regardless.

“If the farmers need more (for their milk), they need it,” she said, while shopping at Safeway.

Cormack said she would pay practically anything for milk within reason to help farmers make a decent living.

Alfred Ochoa of Meyers would pay up to $3 a half gallon to indirectly subsidize dairy farmers. But the trick lies in whether consumers either notice the price of milk or know that the wholesale prices are hurting their rural neighbors.

Ochoa usually pays attention to the price of milk but hasn’t noticed the more recent changes.

California dairy farmers scored a victory last month as the state Supreme Court ruled that out-of-state dairies wanting to sell milk in the Golden State must meet the state’s nutrition standards, which are the nation’s strictest.

The case pitted state regulators, nutritionist groups and in-state dairies against out-of-state dairies like plaintiff Arizona-based Shamrock Foods Co., which has been trying to break into the state’s milk market for years.

Got milk?

A dairy farming association proposal will be discussed at a public hearing slated for Jan. 12 at 9:30 a.m. at the California Department of Food and Agriculture auditorium, located at 1220 N St. in Sacramento.

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