Tracey L. Jackson, director of consumer affairs for the marketing board, said retail milk prices generally rise at the end of summer, when more of the milk produced by farmers is sold for Class 1 usage -- drinking.
Milk used for drinking trades higher than milk used in dairy products such as ice cream, cheese, half-and-half and sour cream.
"The price is affected by supply and demand," Jackson said. "In the summer months there is not as much demand, and more milk is used in producing other products. But when September rolls around, schools are open and more milk goes back to Class 1 usage."
Even though milk is trading higher because there is less available for manufacturing, Jackson was surprised when calculations showed milk would increase 36 cents per gallon from August to September.
"It went up more than we thought it would," Jackson said. "I went back to the computer and checked the numbers to be sure it was right."
Marvin Beshore, a lawyer representing the marketing board, said milk prices are calculated using the prices of all milk products.
The retail price of drinking milk next month will be up more than 15 percent, or 41 cents, since July. The increase is due in part to a 45 percent spike in barrel cheese, which jumped from $1.10 per pound to $1.60 on the Chicago Exchange earlier this month, Beshore said.
"The price Pennsylvania farmers are paid is affected by national supply and demand for all dairy products," Beshore said. Farmers are being paid approximately the same amount for their milk as they were in 1978, he said.
The state marketing board regulates minimum retail milk prices by mirroring "penny for penny" the subsidies the state pays to dairy farmers, Beshore said.
Large supermarkets, which receive bulk price discounts, generally sell milk at the minimum applied by the state, Jackson said. "But you could see slightly higher prices at mom-and-pop stores that don't get a volume discount."
Despite the increase, consumers can purchase milk cheaper at several local dairy farms that are free from government regulation. Farm stores, like the one at Pine View Dairy, 2225 New Danville Pike, sell milk well below retail prices.
Store manager Janet Hess said prices at Pine View have remained low and stable. The dairy sells whole milk for $2.20 per gallon.
"It's been that price for about seven years," Hess said. "We don't change prices too often around here."
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