Consumers Brace For Record Milk Prices As Fuel Costs Surge
LODI (CBS13) — The price at the pump is hard to swallow for consumers who are looking at inflation combined with record-high gas prices due to the war in Ukraine. Groceries have risen 6.5 percent from last year across the board with milk near-record prices.
Hank Van Exel milks 2,400 Holstein and Jersey cows three times a day — each cow produces on average 9 gallons of milk a day. The milk is stored in a 6,500-gallon drum and shipped out to a creamery.
"Probably out of a gallon, are getting a $1.80 per gallon. The rest is all the chain," he said.
Record gas prices mean you're paying more in the grocery store because dairy growers are paying more to get it there.
"I've had a phone call from everybody I deal with from every angle and they are all right now telling me they're going to get gas surcharges," he said.
Van Exel says his drivers have already informed him he will spend $250 more now for each of the three loads of milk sent out each day.
"It's been difficult to say the least," he said.
And then there is the tractor fuel to grow the alfalfa to feed his cows. He pays less for his fuel because tractors don't pay road tax, but it still adds up.
"The large tractor has a 320-gallon tank, and at four dollars, that's what red fuel costs, so $1,200 a day," he said.
And then there's the fertilizer made from fossil fuels.
"Its going to be astronomical. You cannot change too much when you have all your inputs already set-you need to get as much off your ground as you possibly can," Van Exel said.
It will be hard to find cheaper milk elsewhere. Northern California's 24 milk-producing counties made up nearly 95% of the state's market milk. That's why farm bureaus want the state to move toward more oil exploration.
"It's working together and working with our members of Congress and members of the state Legislature," Bruce Blodgett with the San Joaquin County Farm Bureau said. "Ultimately, we have to find fuel supplies for this country. We got to find alternative sources and we got to do it now."
Dairy growers in the Golden State hope they can find ways to save some green or they'll be in the red given this year's fuel, labor and electric increases. Slowing down production just isn't economically viable.
"They have to be milked every day," Van Exel said. "They have to be taken care of, maintained and you have to do that. That's where you get sleepless nights."
One-third of U.S. dairy exports come from California, according to the Califiornia Milk and Dairy Board. But just exactly how much are milk prices expected to rise? Van Exel isn't sure. But experts predict it will increase across all dairy products