My Dearest Customooer: A Letter from Kristi the Cow « Back

Dear Customooer,

Howdy! This is Kristi the Cow coming to you from the Maple Lawn Jersey Farm in central Illinois. I happened to be at the store the other day when you were conversing with another shopper. Yes, I was there, hiding behind the jugs in the refrigerator. I believe you said to your fellow shopper, “Wow, these milk prices are high. Dairy farmers must be rolling in the dough.” While I’d love to have my farmer receive more money when the price of milk goes up in your store, unfortunately it just isn’t so.

You see, unlike most businesses, my farmer does not set the price he receives for the milk, and is unable to pass along his expenses. On average, dairy farmers receive approximately 29 cents of each dollar consumers spend on dairy products. The price is set by the federal government once a month. That price is what he’ll be paid per 100 pounds of milk or per hundredweight (cwt). In the month of June, the base price per cwt is $15.24. To compare, this is more than $5 less than in June of 2011 and approximately $4 more than in 2009. If my milk has more protein, milk fat and is of the very best quality, he’ll get extra money on top of the base price. But if my milk isn’t better than average, he might get less! On top of that, his price is reduced to reflect the ever fluctuating transportation costs. Add in record high feed costs and you can see dairy farmers aren’t “rolling in the dough!”

You might ask, what does cause retail prices to be high? Retail prices are determined by supply-and-demand. You may have noticed that there is often a variance in the retail price from one store to another. This is because of differing “markups” to the cost of milk which is applied by supermarkets, convenience stores and other retailers. The “markups” could be due to additional marketing and other cost the stores incur. Retail prices are increasingly out-of-sync from the price my farmer receives for his milk. Let's do the math. You purchase two gallons of milk at $3.29 each for a total of $6.58. On average, my farmer would be receiving approximately $1.90 from your purchase. Sadly, this is one of the reasons there may not be as many dairy farmers in your area as there used to be.

But there’s really good news, too! No matter what they are paid for milk, we cows and our dairy farmers just keep on providing the best quality product we can. Did you know that milk offers more nutrition than any other food? At about 25 cents a glass, it packs a lot of nutrition for the money. Milk's powerful nutrient package of calcium, protein and seven other nutrients, helps nourish your body, and not just your bones.

I hope this gives you a little more insight into what you just paid for your milk at the store! And rest assured milk provides affordable nutrition for you and your family with every delicious sip. Be sure to check around next time you are at the store... you might just see me there!

Sincerely,
Kristi the Cow