Milk prices trying to keep up with gas

Dairy prices just keep going up and market analysts are now saying by the end of the year we could see milk as high as four-dollars a gallon. That doesn’t cause any problems for Iowa dairy farmer Larry Shover, who farms near Delhi.He says it was steady until recent years which have been “up and down,” because years ago the government had a floor under prices set at 75-percent of parity. But in the nineties that system of keeping prices near parity, or what were considered fair prices for ag products, began to change. Since that time prices have been more up and down, and, he says sadly, “more down than up.” Shover says though the increase may seem steep, prices for farm commodities the last couple years were the lowest in a quarter century. During the same 25 years he says the Consumer Price Index went up 300-percent, and people off the farm don’t think about how it would be if they were still being paid a salary the same as it was back before that 300-percent increase. While the dairy prices stayed low, the rest of a farmer’s costs have been steadily rising, Shover points out. They’ve had to absorb those costs as part of running a farm business — some inputs like machinery have gone up even more than average, and he says health insurance and healthcare cost farmers more than their entire cost of living totaled around 1978 when they last saw high dairy prices. Low prices for milk in recent years led to farmers thinning their herds and producing less, which in turn is blamed for a smaller supply that’s pushing prices up this year for milk, cheese, ice cream and other dairy foods.