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Old 07-29-2004, 07:49 AM   #1 (permalink)
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Never Mind Gas, Milk Price $5/gallon

Quote:
Bay Area charged higher prices for milk
Consumers pay 29% more than U.S. average in study

George Raine, Chronicle Staff Writer
Thursday, July 29, 2004
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Getting milked? Apparently so. A gallon of milk costs 29 percent more in the Bay Area than it does, on average, across the country, a consumer group reports.

And, the largest grocery chains in the region continue charging the most, getting about $2 more than mom-and-pop shops for a gallon of milk.

It adds up to a big bill for a common, and sometimes necessary, purchase. "Our survey shows that big grocery supermarkets are gouging consumers and earning huge profits from this important family grocery staple,'' said Elisa Odabashian, senior policy analyst for Consumers Union's West Coast office in San Francisco.

In a report released Wednesday, Consumers Union surveyed milk prices in 83 food stores in San Francisco and in Alameda, Marin and San Mateo counties from June 14 through June 18. It found the average price for a gallon of milk was $4.71, or 29 percent higher than the $3.66 average price reported by the U. S. Department of Agriculture in a survey of 29 major U.S. cities outside California.

Shopper Dora Delpozo, a researcher from Oakland, was asked outside the Albertson's store at 5727 College Ave. on Wednesday what she made of the consumer group's report. "It's not good,'' she said. "Women need milk. Kids need milk. Everyone needs milk. And it's expensive. I guess it's ridiculous.''

Consumers Union found that milk can be purchased for as much as $2.20 less per gallon at neighborhood grocery stores and smaller chains. Odabashian said, "It makes no sense that the big supermarkets charge customers so much more for milk than many mom-and-pop stores. The smaller stores pay higher costs per gallon for moving a smaller volume of milk, and many of the big supermarket chain retailers are also milk producers, so they should be able to charge less because they cut out the middlemen.''

She acknowledged, however, that small stores set milk prices relatively low so customers will be drawn in and buy that and other goods. Small grocery market workers said that's clearly the practice.

At Mi Ranchito Bayside Market in Berkeley, manager Jaime Alejo said a gallon of milk is $3.29, a price that is stable even while his costs fluctuate. "We don't win a lot on milk, but we want to be competitive with any store. Milk is one of the most important things in the market, and we keep it at a price where the customer will keep coming back,'' he said.

At Market La Raza in San Mateo, Ahmed Ali, an employee, sells Berkeley Farms milk for $3.50 a gallon -- he buys it for $3.09. "I buy cheap, and I sell cheap, but that's a good price for customers,'' he said.

In one pricing comparison in the Consumers Union report, the consumer group said Cala Foods' store on Mission Street in San Francisco charged $4.99 for a gallon of Clover brand whole milk and $4.39 for a gallon of Ralph's brand whole milk, while Casa Maria's California Fruit Market less than a block away charged $3.49 for a gallon of Foster Farms.

Cala Foods is a Ralph's store (owned by Kroger), and spokesman Terry O'Neill had an explanation: "Our milk prices are competitive against the majority of our competitors." He added that Cala Foods offers a range of milk at different prices from different producers. For instance, in San Francisco, Cala Foods was selling Clover brand for $4.99 per gallon; a gallon of Ralphs for $4.39; and in a special, a two-gallon package deal on Ralphs for $5.99.

At Safeway, spokeswoman Teena Massingill said it, too, offers a low- priced brand, Dairy Glen, which is sold as a two-gallon package for $5.99. Since the late 1960s, retailers have been prohibited by state law from selling milk for less than their actual cost.

"We understand milk is an important product for families,'' said Massingill. "We cannot go any lower'' in setting a price for the two-gallon package, she said.

"We would not argue that you can purchase milk a lot cheaper at convenience stores,'' she said, "but go in and buy cold medicine or soup or paper towels, and you will find the price drastically higher. No one is going to do their major shopping at a convenience store. It is cost-prohibitive.''

But it was the $5 per gallon, or more, price for specialty brands in the Bay Area in particular that caught the attention of Consumers Union -- that and the gap between the price farmers are paid and the retail price consumers pay.

"We think (prices are so high in the Bay Area) because consumers will continue to buy milk at any price, and they do not shop around for milk, and they are at the supermarket and they just want to get it done, so they are somewhat complacent in the high price of milk,'' said Odabashian.

Supply and demand, as well as prices set on the Chicago Mercantile Exchange, drive milk prices, which have fluctuated wildly recently after being at rock bottom for two years. About 4,000 dairy farms across the country went out of business between January 2000 and March 2004 because of low prices to farmers, said Jim Tillison, the chief executive of the Alliance of Western Milk Producers in Sacramento, representing dairy cooperatives who market milk for 60 percent of farmers in California.

Still, one of Consumers Union's arguments is that California is the leading milk-producing state -- annually, 35 billion pounds of milk (the equivalent of 4.1 billion gallons, valued at some $4 billion), of the nation's total of 170 billion pounds -- so prices should be more moderate.

The July price to California farmers, set by the state, is $1.58 per gallon, but it will fall to $1.32 on Aug. 1, said Steve Lyle, a spokesman for the California Department Food and Agriculture. A year ago this month, the price was $1.01, the lowest in a year's time, and the record high price was $1. 90 per gallon in June.

Consumers Union complains that as the price to farmers rises, retailers increase the price that much and more, but when it falls they either don't lower the retail price, or they do so only partially, or they're late, said Odabashian.

At the time of the survey, the farm price for a gallon of milk was $1.90, and the California Department of Food and Agriculture estimated that retailers paid an additional $1 per gallon for processing, distribution and store costs, bringing the total cost to $2.90 for retailers. The Consumers Union survey showed that Albertson's charged $5.49 per gallon at most of its locations for its Berkeley Farms brand of whole milk or $2.59 more than cost (an 89 percent profit), while Safeway charged $4.79 for its Lucerne brand of whole milk or $1.89 more than cost (a 65 percent profit).

Cala Foods and Mollie Stone's charged $4.99 for a gallon of Clover brand whole milk or $2.09 more than cost (a 72 percent profit).

After the price to farmers fell to $1.58 per gallon on July 1, Consumers Union checked to see if the retail prices fell at the stores it surveyed. The report said prices remained roughly the same by the end of the first week in July, and by July 20, during another spot check, the retail prices at major supermarkets had dropped between 20 and 50 cents per gallon.

Consumers Union had this advice to consumers:

-- All brands of milk must meet minimum nutritional standards set by the state, so spending more for milk will not buy higher quality milk.

-- Consumers concerned about milk from cows on which bovine growth hormone has been used should check the milk carton for information. Clover, Berkeley Farms and Trader Joe's brands say their milk is not produced with bovine growth hormone.

-- Families should take advantage of the two-gallons-for-less offers at Costco, Foods Co., More For Less, Smart & Final, Safeway, Cala Foods and Albertson's, which are the cheapest per-gallon prices in the survey, as long as two gallons are purchased at one time.



--------------------------------------------------------------------------------
Got money?
Average cost per gallon: $3.66 In the U.S.

$4.71 In the Bay Area
How much does a gallon of Whole Milk cost in your neighborhood?

NYC $4.69

I never drink that much milk, so I just buy quarts which is about $.79 I do remember back in the day when I first was tasked with driving errands for the parents 1 gallon of milk was $2 from 7-11 that was almost 20 years ago.
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Old 07-29-2004, 07:53 AM   #2 (permalink)
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Unless I've gone to the store for my parents, I don't think I've ever bought a gallon of milk. A quart at the corner bodega (NJ, right outside Manhattan) is 99 cents, in some places I've seen it for 1.19.
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Old 07-29-2004, 07:56 AM   #3 (permalink)
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3.89at the grocery store, 2.89 at the gas station, which is also fresh daily, so that's where I get it.
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Old 07-29-2004, 07:59 AM   #4 (permalink)
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I think it's around four bucks here, I'm not sure. I don't "do" groceries. =P
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Old 07-29-2004, 08:07 AM   #5 (permalink)
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I have no idea. I just buy it. Couldn't tell you the last time I looked at the price of milk.
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Old 07-29-2004, 08:18 AM   #6 (permalink)
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Quote:
Consumers Union found that milk can be purchased for as much as $2.20 less per gallon at neighborhood grocery stores and smaller chains. Odabashian said, "It makes no sense that the big supermarkets charge customers so much more for milk than many mom-and-pop stores. The smaller stores pay higher costs per gallon for moving a smaller volume of milk, and many of the big supermarket chain retailers are also milk producers, so they should be able to charge less because they cut out the middlemen.''
Im confused, thats her solution to the "high milk price problem" right there..so what is this all about? Go and buy your milk at the cheaper mom and pop stores, and the supermarkets will eventually lower their prices to compete...this isn't difficult.
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Old 07-29-2004, 08:30 AM   #7 (permalink)
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$2.89, central florida, grocery store (albertsons)
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Old 07-29-2004, 08:44 AM   #8 (permalink)
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$3.19, central florida, wal-mart
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Old 07-29-2004, 08:49 AM   #9 (permalink)
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about 4 bucks at the grocery store, about 3 bucks in the gas stations.

It's been that way here for years. I still can't figure out how a big store with more buying power charges so much more for milk than the little guy.
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Old 07-29-2004, 09:00 AM   #10 (permalink)
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Its about $3 at Costco. Charlotte, NC.

Glad its not $5 here--we go through a gallon a day at my house. That'd get expensive, fast!
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Old 07-29-2004, 09:26 AM   #11 (permalink)
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I have no idea what the price of milk is since I rarely use it. A gallon will usually go bad before I can use it all. I rarely eat breakfast, which is usually the only time I use milk. Other than that, it's only for cooking and I'll buy about a pint, which ends up being about a buck. Therefore, I spend $8/gallon for milk.

The "healthiness" of milk is way overrated. It is not needed in a healthy diet.
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Old 07-29-2004, 09:29 AM   #12 (permalink)
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No offence Kutulu, but personally I won't be taking health advice from someone who says " I rarely eat breakfast,"..
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Old 07-29-2004, 09:40 AM   #13 (permalink)
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$5.00, that's way too much... Milk here runs about $2.68, and a gallon of choc. milk runs $2.99. In total, my kids go through about 6 or 7 gallons a week. I couldn't afford $5.00 a gallon at the rate we drink it.
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Old 07-29-2004, 11:14 AM   #14 (permalink)
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I don't drink milk. it's alright with dry cereal but other than that I think it's bland and not refreshing as a beverage. My dad is lactose intolerant so I grew up on soy products. I don't like soy milk either (it aspires to be a bland/nonrefreshing beverage).

besides, cow's milk isn't meant for humans anyways.

so how much does it cost? I'll probably never know
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Old 07-29-2004, 11:20 AM   #15 (permalink)
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besides, cow's milk isn't meant for humans anyways.
Im confused..where to do you draw the line between what is and isn't "meant for humans"? If cows milk isn't meant for humans, then by the same thinking, any and all animal meat "isn't meant for humans". Come to think of it, plants are living creatures, surely they arn't meant for humans either.

Seems to me that the only food that was "meant for humans", is humans ourselves.
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Last edited by Cowman; 07-29-2004 at 11:26 AM..
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Old 07-29-2004, 11:43 AM   #16 (permalink)
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Quote:
Originally posted by Cowman
No offence Kutulu, but personally I won't be taking health advice from someone who says " I rarely eat breakfast,"..
I'm no shining example of how to lead a healthy life but I do alright. I'm not going to start coughing up anti-milk sites, although there are plenty of them and many may contain some actual good information, most are run by PETA freaks who make every attempt to manipulate facts and data to fit their beliefs.

The thing is that you can get everything that is in milk from other sources.
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Old 07-29-2004, 11:49 AM   #17 (permalink)
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I agree.
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Old 07-29-2004, 02:52 PM   #18 (permalink)
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$3.89 for 2 gallons at Stater Brothers.
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Old 07-29-2004, 03:24 PM   #19 (permalink)
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They get away with prices like this in the SF Bay Area because so many people commute long distances and there are so many two-earner families. A lot of people just don't want to spend the time to make an extra stop to save a couple of bucks on milk, and that's what the chains count on. And the people who don't care are generally those with pretty good household incomes, so the higher price on milk isn't a deal-breaker for them. (And of course these are the people the supermarkets want as customers anyway, because they buy more expensive, high-marketup items instead of bulk food.)
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Old 07-29-2004, 03:27 PM   #20 (permalink)
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I'll add to Rodney's post and say that if you look at most products individually, the markups will vary substantially. However, if you take all of them together, the large chains will probably beat the smaller places. You might spend a lot on one item, but in turn save more in small increments on a bunch of other items.
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Old 07-29-2004, 04:01 PM   #21 (permalink)
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Quote:
Originally posted by mikec
about 4 bucks at the grocery store, about 3 bucks in the gas stations.

It's been that way here for years. I still can't figure out how a big store with more buying power charges so much more for milk than the little guy.
Because you might as well just buy the milk at the grocery store while you're there getting all of your other stuff.
I buy my milk in bags, is that the same as a gallon?

Edit : I see that we've already made the point about buying the milk while you buy everything else.

Last edited by rockzilla; 07-29-2004 at 04:03 PM..
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Old 07-29-2004, 04:14 PM   #22 (permalink)
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$4.09 CANADIAN! *grumble grumble* For a 4L jug of 1%


fucking ridiculous. It went up from 3.89. Bastards. Now i've gotta go back to getting it at the grocery store which is then a huge pain in the ass to bring home... i miss my car *cries*
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Old 07-29-2004, 04:17 PM   #23 (permalink)
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Fallen Angel: 4.09 Canadian is equal to about 3.09 American which, compared to 5 dollars, is pretty damn good.
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Old 07-29-2004, 05:13 PM   #24 (permalink)
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From a guy who drinks a gallon every 2 days, milk is only around $2.50 or so.
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Old 07-29-2004, 05:35 PM   #25 (permalink)
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1.99 at the 7-11 near my house! I win!
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Old 07-29-2004, 07:19 PM   #26 (permalink)
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$3.49 in NH for a gallon of moo-juice.
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Old 07-29-2004, 08:06 PM   #27 (permalink)
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$3.15 at Kroger in Louisville, KY. Lately the better deal has been half gallons being 5 for $6.
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Old 07-29-2004, 08:07 PM   #28 (permalink)
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I'd pay $10 a gallon if I had to.


*hugs his moo-juice carton, wishing it was a Canadian bag*
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Old 07-29-2004, 10:11 PM   #29 (permalink)
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prices in hawaii

try over 6 dollars (sometimes as high as 8) in hawaii.. I don't live there but stayed for nearly two weeks (just got back monday). The funny thing is that beef is actually reasonably priced. IANAF, but it seems kinda odd (considering they have some of the countries largest cattle farms). Cmon, throw in a few dairy cows while your at it maybe?
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Old 07-29-2004, 10:19 PM   #30 (permalink)
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Free....my parents turn out of date dairy products into milk replacer for animal feeds so usually we get some dirty jugs off the truck that are still good
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Old 07-30-2004, 10:38 AM   #31 (permalink)
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Quote:
Originally posted by kielvsworld
try over 6 dollars (sometimes as high as 8) in hawaii.. I don't live there but stayed for nearly two weeks (just got back monday). The funny thing is that beef is actually reasonably priced. IANAF, but it seems kinda odd (considering they have some of the countries largest cattle farms). Cmon, throw in a few dairy cows while your at it maybe?
I'm more butthurt about beef prices than milk. Ribeyes go for between 8.99-11.99/lb
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Old 07-30-2004, 10:56 AM   #32 (permalink)
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Wow. Here in Vancouver the big supermarket chains are the cheapest for milk, while the gas stations and corner stores charge the most.
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Old 07-30-2004, 11:34 AM   #33 (permalink)
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Quote:
Originally posted by kielvsworld
try over 6 dollars (sometimes as high as 8) in hawaii.. I don't live there but stayed for nearly two weeks (just got back monday). The funny thing is that beef is actually reasonably priced. IANAF, but it seems kinda odd (considering they have some of the countries largest cattle farms). Cmon, throw in a few dairy cows while your at it maybe?
On the upside, it's not like you have to drive far to get it...I mean, you're on an island and all.
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Old 07-30-2004, 11:36 AM   #34 (permalink)
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Quote:
Originally posted by wrkime
On the upside, it's not like you have to drive far to get it...I mean, you're on an island and all.
what you think he lives here?

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Old 07-30-2004, 11:41 AM   #35 (permalink)
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that's pic is classic!

Quote:
Originally posted by wrkime
On the upside, it's not like you have to drive far to get it...I mean, you're on an island and all.
Shit we live across the street from the grocery store and we drive there. I'm not carrying 60 lbs of groceries across the parking lot and through my apt complex.

Last edited by kutulu; 07-30-2004 at 11:44 AM..
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Old 07-30-2004, 12:14 PM   #36 (permalink)
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on average milk around here costs between 1.50-3.75, depending on which store you go to.
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Old 07-30-2004, 02:33 PM   #37 (permalink)
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OMG what a rip.....I pay no more then 3 dollars where I am at. If I had to pay that much I would just stop drinking milk all together.
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Old 07-30-2004, 03:47 PM   #38 (permalink)
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My GF and I usually buy 2 gallons at a time. We save a few bucks that way and can get 2 gallons for 5 bucks usually.
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