Rising Milk Prices Shrink Profits For Dean Foods, US Retailers

Raw milk prices have reached historically high levels, helping push Dean Foods to a first-quarter loss. Some retailers, however, have chosen to absorb the increase rather than risk alienating price-sensitive consumers.

The increase in the base price of a gallon of 2 percent milk across most of the United States has gone up at least 54 cents since last June, said Mary Ledman, who publishes the Daily Dairy Report, based in Libertyville, Ill.

But the price paid by many shoppers has not increased nearly that much.

“I see retailers absorbing the increase here in the Chicagoland,” she said. “It’s a loss leader. They’re using [milk] to bring people into the store. They’re not recovering the true cost of a gallon of milk.”

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