Oct 02 2007

Why I pay $3.61/gallon for milk


I spotted an advertised price for a gallon of milk in a Walgreens ad–only it wasn’t a dollar figure. It read “state minimum pricing,” or something to that effect. What? Turns out, the dairy industry is regulated by the Pennsylvania Milk Marketing Board. On their web site, their mission statement reads:

To ensure that Pennsylvania’s dairy industry remains vital, the Milk Marketing Board provides a regulatory environment that facilitates a safe, adequate supply of wholesome milk by providing security for its dairy farmers and milk dealers; while providing an adequate supply of dairy products for consumers.

Oh.

The federal government regulates the dairy industry, too. [Whoops, when I was researching this earlier, I thought that I found that the federal government regulates a portion of the dairy industry, as well. I can’t find data to support that now. Thanks, Heather, for alerting me of my mistake.]

As dairy farmers’ expenses go up, including paying high fuel costs (just like everyone else), their profit margin becomes much more narrow. Makes sense. I certainly don’t want the dairy farmers to go out of business. I like milk, ya know?

Now that I know there’s a minimum price, I know the lowest cost I can pay. I will not pay more than that. Here’s a link to a complicated chart about this month’s minimum milk prices in Pennsylvania. I live in “Area 5,” as they like to call it in regulated-dairyland.

What this means for me:

In October, the lowest retail price for one gallon of 1% milk is $3.61. That’s what I paid last month (the lowest retail price for that was the same) so it’s good to know I didn’t overpay.

Curious about the price for this time last year? The same milk minimum in this zone was $2.84. Big difference!

I dislike how fat-free milk tastes. Blech! I need more fat than that. One gallon of fat-free milk can sell for $3.53. If I want to save $0.08, I guess I could buy skim milk for cooking.


Powdered milk:

I’m a fan of using powdered milk when I can. But, I haven’t been able to find it very cheap in Pittsburgh. The lowest unit price I have been able to find was $19.99 for a box making 20 quarts, or about $1/quart. As four quarts=one gallon, 20 quarts makes five gallons. At that price, I’d be paying $4/gallon for powdered milk. No thanks!

It pays to do unit comparison pricing like this. Now, I know that for powdered milk to be the better deal, I’ll need to find it at less than $0.90/quart. Know of any place that sells it for that price? How much do you pay?



6 Responses to “Why I pay $3.61/gallon for milk”

  1. We buy whole milk and then water it down 1/2 and 1/2 so it’s almost the same fat content as 2%. We haven’t noticed a difference in taste. It makes milk a whole lot cheaper! I found your blog from Crystals and I’ve been enjoying reading it!

  2. Our Aldi’s here sells powdered milk for around $7. I don’t have my book or I’d tell you an exact price. D=
    Have you tried buying it in bulk online? Walton Feed or any camping site will have it.

  3. I haven’t tried finding it online yet, but thanks for suggesting a store!

  4. Last year we started drinking powdered milk from Aldi @ .40 a qt. $7.99 for 20 qts. Now Aldi charges $12.99 for 20 qts.

    We have bought 2% milk for the past 2 weeks @ $3.70 a gallon which is .93 a qt.

    The powdered milk is the cheaper buy, but it also hurts our grocery budget for one week out of the month to have to spend the extra initial $5 on milk.

    Our budget is $60 a week for 6 people.

    I guess I’d better stock my pantry with powdered milk now before the price goes up any higher.

  5. State regulation and federal regulation are two VERY different things. Please keep your facts straight.

  6. Hi Heather-

    Whoops. I do understand the difference between state and federal regulation :) but I made a mistake. It’s corrected above. Thanks for pointing that out.

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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