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4/4/2004

Milk prices are on the way up in Colorado

The Associated Press

DENVER — Grocery shoppers will soon start paying more for anything made from milk and milk protein — everything from cheese and ice cream to energy bars and nacho-flavored tortilla chips, experts said.

The price of a gallon of milk is likely to rise by at least 70 cents in Colorado and other states between now and May 1 as the government adjusts prices to reflect a worldwide shortage of dairy products.

And it’s only the beginning.

“This is just the tip of the iceberg,” said Dave Stukenberg, assistant market administrator at the Federal Milk Market Administration office in Kansas City, Mo., where Colorado’s milk rates are set. The office, a division of the U.S. Department of Agriculture, sets milk prices regionally and adjusts them monthly.

Consumers could see milk prices immediately jump about 15 cents a gallon and climb another 50 to 55 cents next month because of a federal hike in the minimum price bottlers and distributors must pay farmers for milk.

Retail prices for a gallon of milk vary, and the impending price spike could hit at different times depending on the grocer and location.

The rising prices of dairy products may come as a shock to many shoppers, but they’re welcome news for Colorado’s commercial dairy farms.

In Colorado, low demand has meant dairy farmers “received the lowest prices they’d received in 30 years,” said Greg Yando, a former dairy farmer and deputy commissioner of the Colorado Department of Agriculture.

Demand for milk products has been relatively low in the past few years, in part because of a stagnant economy and consumer cutbacks on restaurant meals after the 2001 terrorist attacks. Restaurants consume a high proportion of dairy products.