Milk seems to be the next hot thing after gasoline.
Yesterday, at our local SAM’s club, milk was priced at $3.49 a gallon … and gasoline was at $2.55.
Anyways, did you know that milk prices are rising globally because affluent people in emerging economies are drinking more milk? 
Here is what the NY Times has to say about it:
But the biggest force driving up milk prices is the same one that has driven up prices for conventional commodities like iron ore and copper: a roaring global economy. Rising incomes in emerging economies from China and India to Latin America and the Middle East are lifting millions of people out of poverty and into the middle class.
It turns out that, along with zippy cars and flat-panel TVs, milk is the mark of new money, a significant source of protein that factors into much of any affluent person’s diet.
Great, earlier I thought only olive oil is a mark of economic prosperity.
The article goes on to say that:
… The average person in China now consumes more than six gallons of milk a year, up from more than two gallons in 2000.
[OK, that gives me some kind of a complex - our annual milk consumption, for a family of two, is about 30 gallons! - well, holy cow!]
As an aside on the emerging economies issue, are we getting into an habit of attributing every market phenomenon to how much people consume in emerging economies? Sometimes, it makes sense, but often, it seems as if people are dying to make a connection to China, India, Brazil, Argentina, etc… in order to explain domestic market effects in the US [with no regards to how the consumers in US are using up resources].
By the way, some smart people are already making hay of the milk situation by stealing cows.
Driven by a combination of climate change, trade policies and competition for cattle feed from biofuel producers, global milk prices have doubled over the last two years. In parts of the United States, milk is more expensive than gasoline. There are reports of cows being stolen from Wisconsin dairy farms.
Ironically, just yesterday, we were discussing about how burglars are not smart people. So, stealing a cow might go against the grain - that would mean a burglar with a lot of foresight.
A whole new meaning to the term “cash cow”, eh?
For serious people with an economic inclination, here is a great writeup [pdf file] on how milk is priced in the US.
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So, remind me, how is this “roaring global economy” good for the American hamburger flipper?
Minimum Wage: If you read the NY Times article carefully, here is what it says:
“International prices have now risen above the subsidized price of milk there, making it profitable for American dairies to export their milk.”
If the US capitalizes on such opportunities, more people will be in a position to buy hamburgers. Hamburger flipper = happy. And btw, it’s not just milk - similar demands will arise for milk based products, creating opportunities for many other areas of the food industry.
I calculate that I got through about 40-50 gallons of milk BY MYSELF each year. My wife might go through 3-4. I obviously drink a lot of milk, and I have no plans for osteoporosis as I age
In our home we go through almost a gallon a day! (we have 3 kids under 5) The current milk price here is around $4.19 at a regular grocery store, at Aldi I can get it for $2.99. The demand for ethanol is such that farmers have to pay more to feed their cows corn, driving the price up. I enjoyed reading this perspective as well. I’m doing my best to get the kids to drink more water!
costco’s milk prices increased another quarter to $4 something last month. The man in front of me was shocked milk prices were going up AGAIN after he just paid another 50 cents.
Maybe we should consume less milk and seek other sources of protein or ways to prevent our bones from rotting.
That’s not the only reason for rising milk prices. Because of our misguided corn ethanol program, grazing land has been turned into corn land to meet the increased demand for corn. This lowers milk production, causing milk prices to rise.
Good thing i live in UK, where prices are high but stable. Try buying a litre of petrol here.
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