California drought may boost milk prices - FOX Carolina 21

California drought may boost milk prices

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About 15 percent of the milk produced in America is exported. (Source: FOX) About 15 percent of the milk produced in America is exported. (Source: FOX)

SAN JACINTO, CA (FOX) - Conditions remain dry in California, making it especially hard on the agricultural market. Dairy farmers say it's hitting their livestock the hardest.

The stubborn drought is causing all sorts of problems for state farmers, creating one big issue that'll eventually affect consumers - the price of milk.

"It's just like supply and demand. If the feed price goes up, people can't afford to pay the feed, so then they go out of business. So there's less milk on the market. So that's how it would work where milk would increase in price,'' said dairyman John Oostdam.

Although there's no mandatory water restrictions in California, the lack of water makes it very difficult for farmers to grow necessary food - like alfalfa - to feed their livestock.

"Because the more it costs to feed them, the more milk prices are gonna be," said Betsy Hunter-Binns of the Milk Producers Council.

And as overseas purchasing goes up, so does the price stateside.

"Approximately 15 percent of the milk we produce now in the United States goes for export," Oostdam said.

"We live in a global economy, and other folks want our great cheese," said Hunter-Binns.

The situation is so dire for farmers that California Gov. Jerry Brown is proposing to spend nearly $700 million to get water back on tap, though most consumers are ready for that water to go to agricultural needs first.

"We need less green grass and more water going to the farmers and the dairy people," said Gale Taylor, a dairy consumer.

Analysts predict milk prices could jump up 50 to 60 cents a gallon starting in March. The current farm price for milk is about $23 per hundredweight, compared to about $18 per hundredweight this time a year ago.

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