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Economists are guessing milk prices will be up 80% this summer. Jill Barshay reports on why the dairy product is suddenly getting so expensive.
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Kai Ryssdal: Forget those ads that say "Got Milk." It's almost to the point where they should say, "Got Money?"
Economists are guessing milk prices will be up 80 percent this summer. It's already as expensive as what we're paying for a gallon of gas. And much as rising oil prices are felt in other parts of the economy, so too will be the higher cost of milk.
Marketplace's Jill Barshay now on why it's suddenly getting so expensive.
Jill Barshay: Every year for the last 15 years, Americans drank less milk.
Bill Herndon is a dairy economist at Mississippi State University. He says we're drinking more milk now — a lot more.
Bill Herndon: The market is really in a new era.
Herndon says Americans drank 1.4 percent more milk during the first three months this year, compared to the same period last year. In China, India and Latin America, people are enjoying more dairy delicacies, like ice cream and butter.
Fast-food restaurants all over the world are serving milk with their kiddie meals. And food companies are using much more dried whey. It's a by-product of cheese making, used in all sorts of beverages.
Herndon: These high energy drinks, you know like Red Bull, that's what goes in those energy drinks.
Herndon says all this demand is driving the price of milk way up. American farmers are getting 50 percent more for their milk than a year ago.
American shoppers are feeling the pinch as well. The average supermarket price for a gallon of whole milk was $3.38 in May. That's up 18 cents since December. Some dairy experts say milk could go as high as $4.50 a gallon.
Chris Galen works for the National Milk Producers Federation. He says the high prices may not last for long.Chris Galen: Soon the high prices will stimulate more milk production. Farmers are very ingenious when it's financially profitable to do so, trying to get more milk out of their cows.
Economists say the milk market is frothy right now, but the bubble could burst next year.
In New York, I'm Jill Barshay for Marketplace.
