Average gas price nationwide is $1.99, Average gallon of milk at Wal-mart is $4.99

[Hutzpa]

You will think since the price of oil/gas is going down shouldn't the same be applied to food products?

Why the disparity between oil price and food products? or

Is food products the new oil?

Same goes for air fares, we've been told by the economist that the price of oil/gas affects the price we pay
for travelling yet the price of air fares remains high.

When was the last time you travelled and what was the price you paid for air fares?

edit
changed the price to $4.99 from $5.10

[GGJohn]

1. 5.10 a gallon?

Where the hell do you live? Here in Flagstaff, the average price is 2.99 a gallon.

[The Velveteen Ocelot]

2. One reason air fares haven't gone down yet is that

airlines normally forward-contract for their fuel in order to plan for a predetermined, budgeted cost, and they will have already bought a lot of fuel at the higher previous prices for future delivery. So ticket prices probably won't change until the airlines can start buying their fuel at the new, lower prices.

[Sen. Walter Sobchak]

7. They also have pricing power for the first time in many years

and even bigger monopolist hubs.

[NuclearDem]

3. THE CAT DRINKS UNLEADED FROM NOW ON

[joshcryer]

4. Milk consumption is down, for what it's worth.

[Fumesucker]

12. Evidently it's worth quite a lot, over $4.00 here

[joshcryer]

13. Yeah, I was saying, supply and demand.

If there's less demand for it then the supply is a lot lower and prices go up.

I actually don't like it because I use milk in my protein shakes.

It's about $3.50 here.

[Fumesucker]

15. So you're saying the demand for gasoline has increased?

Hence the lower gas prices?

[joshcryer]

16. Nah, the supply of gas has increased.

The demand for milk has decreased.

And I think it's a lot easier to drill a few wells than it is to set up FDA approved milk factories.

[Hutzpa]

24. I don't think the demand for milk has decreased

it's the supply that has been stifle to create demands just as they did with oil, the result is high price for a gallon
of milk,

[Glassunion]

38. "The demand for milk has decreased."

That is not a 100% accurate statement.

Milk consumption is on the decline about 30% since 1970. However, other milk products (cheeses, ice cream, yogurt, butter, evaporated products, etc...) are increasing or holding steady in the US.

Not to mention that the US is currently exporting more milk that any other time in recent history, and that has far offset the decline in simple milk consumption. In 2000 about 3% to 5% of US milk production was exported, we are on track (numbers not in yet) to have that increased to about 18% to 20% for this past year.

[joshcryer]

50. Did you not see post #4?

[Glassunion]

53. Yes.

[demigoddess]

60. it says demand for 'whole milk'

perhaps the demand for skim milk, low fat milk, and soy milk are all up? the devil is in the details.

[herding cats]

70. Demand for skim milk is up in the US and we now export our milk at a much increased rate.

Admittedly I'm using this specific graphic because I think it's cute as a can be.



http://www.foodsafetynews.com/2014/12/chinese-demand-for-dairy-products-spurs-u-s-exports/#.VLtbZi6zskI


Even still, there's about to be a milk market bust due to Russia imposing sanctions against the US and China having a glut of milk powder, futures markets are currently down. Which will be met with lower prices in the US in an attempt to increase local sales.

[Glassunion]

36. But that is not the entire picture. "Milk" is but one tiny piece of what goes into the price...

Demand for milk products is higher than it has ever been. Then take into account that we are exporting more and more milk every year, and what you are left with is high demand and higher prices.

[dumbcat]

45. I notice that graph is "whole milk"

I drink a lot of milk, but only reduced fat versions, like 1 or 2%. I imagine many people do that. Back in the 50's and 60's there was usually only whole milk available. As more and more people become health conscious I would think they would be consuming lower fat versions rather than whole milk.

[Glassunion]

55. You are correct. See Post 39.

Whole milk consumption is way down, however non-fat, skim and "%" milk consumption is up.

Add to that the other milk products (cheese, yogurt, etc...), US production and consumption overall is up.

[Hassin Bin Sober]

5. I'm lactose intolerant and drive a gas guzzler.

I'm shittin in tall cotton.

[olddots]

6. milk gives me gas

sorry .

[The Velveteen Ocelot]

8. Good thing cars and airplanes don't run on milk.

[RobertEarl]

9. Shows oil was fixed price

They kept it fixed high for a long time, but when people got cars with twice as much mpg, and the poor quit buying, the supply made the prices come back down to a more real level.

We was screwed. Now, not so much.

Milk is not something that has sat in the ground in a raw state for millions of years just waiting to be sucked up. Milk is a perishable commodity.

[Hutzpa]

10. Based on simple economics

when there is demand the price increases and when demands drops the price decreases, you will think it applies to
food products too.

[joshcryer]

14. Not if suppliers stop producing a low demand product.

This is apparent in Bakken oil projects. Lots of them are shuttering due to the low cost of oil. I expect oil is a lot easier to build up or put online than cow milk. Need facilities, cows, feed, etc, to make milk. Bakken oil (or any other fracked oil) just needs tech to get at it and some water. Put the unused rigs into storage until they're needed again, come back and profit.

Can't put cows out to pasture until they're needed again...

[Hutzpa]

17. The more cows you have the more milk you can produce

trying to pretend that the cost to milk a cow is the same as drilling for oil is misleading, economist are destroying
the basic fundamentals in economics by allowing themselves to be used by greedy corporate handlers.

[joshcryer]

19. But if there's a lower and lower demand for milk producing cows...

...it's not worth it to breed them... IMO.

[RobertEarl]

20. Milk is subsidized by the US

Not sure how much, but a couple of years ago the subsidies were going to be cut and it was estimated the market price would be @ $7 a gallon.

It's a main food, and so it is subsidized. It is not a free-market based price.

The problem is milk can go to waste real fast, and does. We could be out of milk in days. Out of Oil? Decades.

[TheBlackAdder]

11. It's pretty bad when CVS has the better Rosenberger's milk for less. nt

[CK_John]

18. Gas 2.77 regular, milk 3.85 whole.

[mucifer]

21. I make my own almond milk. It's pretty cheap and easy to do.

plus less suffering for the cows.

[jberryhill]

22. I tried that, but could keep a grip on those little almond teats

[A HERETIC I AM]

27. You just need to use Hemostats.

The right type is critical.




Don't ask me how I know this.

[mucifer]

33. It's funny but true. You do strain the ingredients through a bag and

you have to use you hands to squeeze out the almond milk:

[Glassunion]

34. Yeah, that's the hardest part of being a vegan farmer...

Waking up at 4:30 to milk the almonds.

[mucifer]

37. Touche!

[taught_me_patience]

42. Almond milk is extremely expensive

I own a coffee shop that makes almond milk. Here's how the cost breaks down:

1250g almonds blanched and slivered (2.5) lb @ 6/lb = $15
250g mac nuts (.5lb) @ 12/lb = $6
250g dates (.5lb) @ $2/lb = $1

Total cost $22
Yield = 2 gallons
Time to make = 30 min

Cost per gallon = $11

Keep in mind that we are getting almonds at bulk wholesale price. Blanched almonds are typically $8-9/lb at the grocery store or on the internet. The almonds must be blanched, or the milk will NOT taste good.

[Glassunion]

44. Have you tried buying them whole and blanching them yourself?

You could trim some of the cost down. I made some homemade almond milk, and it took about 5 minutes to blanch and peel them. But that was only one pound.

[mucifer]

46. I buy a big bag of raw almonds at Costco soak a cup overnight

and add a little vanilla and a date and a little bit of salt and I have a liter of almond milk.

[jberryhill]

23. Dammit! Just as I finally perfected my milk-powered car!

[bobGandolf]

25. They get you going, or coming.... n/t

[Hutzpa]

26. Not sure what your point is?

[bobGandolf]

32. Gas prices go down, something else goes up....

bottom line we always pay more

[Hutzpa]

63. We should all just pack up and go home then

as there is no point discussing the high price of commodities.

[bobGandolf]

65. If you're looking for an argument, go find...

someone else. Just pointing out a fact, that's been true my 60 years on the earth.
You can "discuss" as much as you want.

[Hutzpa]

66. What fact is that?

that prices go up and down? I would have kept that to myself if that's all I have to contribute to the discussion.

[bobGandolf]

67. Good reply,

hope you didn't stay up to late coming up with it.

[Skittles]

28. am I the only person who gets by without EVER buying milk?

[jberryhill]

29. No. I steal it also

I cut my grocery bill by 75% with coupons and shoplifting.

[Brigid]

30. If food prices go up . . .

Well, guess what helped to precipitate the French Revolution.

[Quackers]

31. It's $1.00 here

For the half gallons at Kroger. So $2.00 per gallon if you buy 2.

[Kilgore]

35. Who actually sets milk prices in the US?

Here is an excerpt,

"Federal milk marketing orders set minimum prices for about 70% of the Grade A milk produced in the United States, and Grade A milk constitutes 99% of all U.S. milk (see sidebar: Grade A and Grade B milk). California, which accounts for more than 20% of U.S. milk production, uses a state pricing system that is very similar to federal order pricing."

From this article,

http://www.aae.wisc.edu/aae320/agpolicy/basicmilkpricing.pdf

The discussion on milk pricing starts on page 9.

[Glassunion]

40. Did the drought have an effect on milk production in the CA this past year?

[Kilgore]

62. Have no idea

I live in wet, wet, Washington

[Glassunion]

39. Well... Gas production is up and demand low = Low Prices

Milk Production is nominally up and demand is up = High Prices





You can see that plain old milk consumption is down, but other milk product consumption is up or flat. Just an example from one state.

[brooklynite]

41. Maybe the oil and cows have absolutely nothing to do with each other?

BTW - the reason air fares have not shifted is that airlines buy futures on fuel to hedge their bets; they're still paying the old prices.

[Cal Carpenter]

52. Actually, they do though

Farming is highly dependent on use of oil - fuel for tractors for the grass and grain grown to feed the cows. Fertilizer. Trucks to transport grass, grain, and the milk itself, and so forth. It is a major aspect of food production in general, particularly where livestock are involved.

However, due to the way the market functions the effects of those price changes aren't often immediate (well, they can provide a convenient excuse to *raise* consumer prices even if the real impact isn't being felt to producers yet, while the opposite rarely holds true...)

But to say that they may "have absolutely nothing to do with each other" is incorrect.

[SHRED]

43. Did consumer goods drop in price when...

...manufacturing was outsourced to slave labor wages?

--

[goldent]

47. They did, although it is sad to admit it.

[Sunlei]

49. A lot of products are built with $7 a day mexican border labor and sold to American consumers OR

routed back to our major ports in Texas/ Florida and considered American exports.

Slaughter houses too, big frozen shipping containers of export 'meat' killed in mexico border work camps and then routed back to our Ports for export. Or processed with $7.00 a day, cheap labor and sold to Americans.

[Sunlei]

48. American dairy has increased product exports & increased the profit made off of American consumers.

I think it was in Australian Dairy industry business news where I read American dairy has increased export by about 20% in a year. The USA Corp cuts into Australia/NZ dairy exports to the booming middleclass of consumers in China. and the TPP countries full of the booming class of consumers.

These Corps will charge what the market will pay, it increases profits to raise the price.

[aikoaiko]

51. Yeah, I buy the organic DHA O3 fortified stuff at $8/gal

[Faux pas]

54. Gas is $2.55 here and

iceburg lettuce is $2.99 a head.

[Glassunion]

56. Last time I was in OR, the blueberries were dirt cheap. 1/2 of what I pay in NJ.

[Faux pas]

57. How long ago what that Glassunion?

I live on the coast and for some reason we pay the premium on everything.

[Glassunion]

61. 2010

[dumbcat]

58. Gas $1.67, milk $2.98/gal

in Central Texas. Just finished a grocery run.

[Egnever]

59. ugh the idea of buying milk at Walmart makes me a little ill

Hell the idea of buying any food at Walmart makes me a little sick to my stomach.

[tabbycat31]

64. Not sure what I paid for milk last time I bought it

I go through about 1/2 gallon a week (mostly in coffee).

Last time I flew (last minute for a funeral) was last year (2013) two days before Christmas and I was able to get a round trip for $298. (NC to Boston)

[oneview]

68. Can cows be fracked?

[Packerowner740]

69. I paid $1.69 outside Ft Worth at the beginning of the week

$1.72 in El Paso now.

[herding cats]

71. You're about to see a reduction in milk prices.

There's no way the current prices can be sustained. China is decreasing their imports of US milk, which were considerable in 2014 and a real contributor to the increase in pricing in the US, due to having a current excess of milk powder, and Russia (this is the oil wars connection part) has imposed sanctions on US imports of milk. Both of these factors have caused a drop in milk futures. Eventually everyone will see the impact at their local grocery. I had read either today or yesterday in some US dairies they're actually dumping the product (milk) out due to the lack of demand.

The milk bubble has bust, at least for the moment.

[WillowTree]

72. Milk was $2.69/gal.......

.......at Aldi in the Chicago Western suburbs this evening.