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A potential hefty price rise for milk will is not on the horizon, at least not anytime soon, dairy officials say.
“I don’t see much change; prices may even go down a little bit,” said Maury Cox, executive director of the Kentucky Dairy Development Council.
The average gallon of milk costs about $3, according to the USDA. But there had been a fear of prices as high as $7 per gallon because of issues related to farm bill that was tied into the “Fiscal Cliff” in Washington.
Without an extension of the farm bill or a new bill, that price could have doubled, Cox said.
“Senator Mitch McConnell worked out a deal that extends the two thousand and eight farm bill, so prices will just go as they have been in the market,” he said.
But Cox said that all that did was put a bandage on the problem.
“They’re just kicking the can down the road until the end of August,” he said. “Between now and then, hopefully some issues will be worked out. The real issue is that everybody purchases milk, so most households would be affected by a seven-dollar-a-gallon price.”
Consumers may be breathing a sigh of relief, but dairy farmers, such as Kalmey Dairy Farm on Zaring Mill Road, are sighing in frustration.
John E. Kalmey, a dairyman with many decades of experience, winner of Kentucky Farm Bureau’s award for distinguished service to agriculture, who runs one of the county’s largest dairies, a 485-ares, 140-head operation, along with his son, John C. Kalmey, said that dairy farmers desperately need milk prices to go up at least a dollar a gallon.
“Just that much increase would help farmers pay off loans and replace old tractors and other equipment and just keep things running,” he said. “And that is still way less than the increases people are paying for gasoline. Anne sure was right what she said in that letter.”
Kalmey refers to an opinion piece that his daughter-in-law, Anne Kalmey, wrote in October in which she discussed the hardships that dairy farmers have been enduring for decades because milk prices have stayed the same for as much as 15 years, making the argument that while inflation has affected virtually every other economic sector, it has not touched milk prices.
Cox said consumers may balk at a rise in, say, fuel costs, but a he thinks they would consider a drastic rise in milk prices an even worse crisis.
“They would say, ‘Oh, Lord, we’ll go broke,’” he said. “They can charge four dollars for a gallon of gas, and things will just go right ahead, but not seven dollars for a gallon of milk.”
Kalmey said that he is not advocating that milk prices double, but he thinks consumers could absorb a dollar or two increase on the gallon with less trouble than they think.
“The increase to the consumer would only be the equivalent of the price of one or two unhealthy snacks,” he said. “They’d be better off without them anyway, and they’d be getting a healthy product in milk.”
Shelby County Agriculture Extension Agent Corinne Kephart said she could understand that both the public and dairy farmers, including Shelby County’s 24 dairies, are just worried about trying to keep their heads above water.
“It’s an uncertain economic outlook right now, and I think everybody is just kind of proceeding with caution,” she said. “Milk prices, generally speaking, have been better this year, but expenses are so much higher as well. Grain prices are high, and the economy hasn’t been stable and just like with any other type of business, it’s scary. We just have to hope for the best and plan for the worst, and take it day by day.”
Cox said that although he acknowledges that Kalmey’s claim that another dollar on the gallon would help farmers is true, there’s no guarantee that farmers would get the majority of that increase, and that a lot of it would probably go to the middleman.
For a gallon of milk that would cost between $3 and $4 a gallon, the dairy farmer would receive less than $2 of that, he said.
Also, he added, there has to be a balance between what the consumer wants and what the farmers need.
“There’s got to be an equilibrium,” he said. “The government wants to make sure we are going to have cheap food, but we as taxpayers are paying the price for that in taxes and other things. It’s the way the system has been working, and many times they just put a Band-Aid on it. That is what is happening now. So we’re still going to have some fluctuation, but we’re not going to have anything like what they were talking about.”