Why does the price of gas affect the price of milk?!
Why does the price of gas affect the price of milk?
Answers:
Oooh, oooh, I can answer this one! My husband's a dairy farmer.
Well, most obviously, farmers use gas for their tractors, their little push-carts, their farm equipment, etc. And then there's the transportation of the milk from the farm to the company, then from the company to the grocery store.
Also, farmers use gas when they cut and bale hay, make corn silage, and do all that other feed stuff. Or they pay for the feed company to deliver the cow chow, which uses gas again.
But, a hidden factor is that these days, ethanol is looking like a very good way to make fuel. And ethanol uses corn. So, the gas companies are buying corn, which drives up the demand, which raises corn prices. And cows eat corn (and a whole lot of it!), so that raises milk and beef prices.
Really, if we don't find alternative cheap ways of energizing our civilization, society as we know it is going to change drastically. ALL food prices will go up, but especially animal-based products. Farmers will go out of business, or have to concentrate on producing for local markets. And maybe cities will get entirely too expensive to live in.
The price of gas is a huge deal.
It affects the price of the milk as milk needs to be transported.
Therefore if the price of gas goes up, its costing more for the same distance of travel.
Cows don't walk to the supermarket. The milk is rasported by trucks.
Transport is of vital importance in present economy,everything from raw materials to finished goods depend on transport,when gas prices rise,there is no doubt that that it will eventually effect the selling price of goods & that means the consumer having to dig deeper into his pocket.
the cost of transportation is passed on to the consumer. its not just milk but milk has the biggest, easily recognizable price increase.
Transport costs.
I,ll give you the true reason. Prices raise and fall in a large part due to the price of diesel fuel because milk from california may be transported to the east coast. Or from the east coast to the west coast. Or from florida to wisconson and so on. Why you ask? Because all milk tastes different from all states depending on where the milk comes from. A good example is that wisconson, the cheese capitol of North America, imports milk from all over the U.S. To make different tasting cheese. All the while exporting wisconson milk to the same different states so they can make different tasting cheese and milk also. Make sense now? By the way, I have a trucking company. This answer comes from experience.
By the way, we also bring eggs from florida to ohio in reefer (refridgerated) trailers for the same reason
MadamM, Great answer. I only elaborated on it from a transportation point of view. You have my vote!