Food prices for an average family are expected to go up $150 this year.
One of the main culprits is an increase in dairy prices.
While some families may be feeling the pinch, dairy farmers are hoping higher prices can carry them out of debt.
That’s because 2009 was not a good year at Riverside Farm’s Ransom Conant. In fact, it wasn't a good year for most dairy farmers.
“2009, you cut everything you could cut, cost control cost control but that only goes so far,” said Ransom Conant, a dairy farmer.
The financial collapse left dairy producers very much in the red. Most had to borrow money to survive.
“It wasn't out of the question to have to borrow hundreds of dollars per cow on the farm to operate that year,” explained Conant.
So with milk prices now at historic highs, it's a time for catch up for local dairy farmers and pay up for customers.
“Whenever the price of milk goes up at the farm, price of milk goes up in the store,” said UVM Extension Agriculture Economist Bob Parsons. “When the price of milk drops at the farm, it sure seems to take a long time to drop in the store."
Parsons says milk costs about $4.40 a gallon at the store, up as much as $.50 from last year.
One reason milk prices are on the rise is that the U.S. is exporting more of it than ever before, leading to increased demand.
“As long ago as 5 years ago, we were lucky if we could export 5% of our annual milk production. When we're exporting 16%, it has been a huge benefit to the dairy industry. So that is what has increased the milk prices in the last 2 years,” explained Parsons.
Milk prices in February hit record highs and continue to go up.
That’s an encouraging sign for Conant who's still paying off 5-year old debt while, always, looking towards the future.
“We need good prices to support our business to be able to reinvest in your business, to be able to do things better than we did before,” said Conant.
And for consumers watching their wallets, experts say exports will level off at about 16% which could stabilize dairy prices in the future.
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