And You Thought Gas Prices Were High.. "Agflation"
The chart above shows prices for retail gasoline prices and wholesale milk prices over the last year, using data from the EIA (monthly gas prices) and Global Financial Data (monthly average corn prices paid to farmers), both converted to a price index that equals 100 in June 2006. As the data show, gas prices are about the same as a year ago, while milk prices have increased by 50% in the last 12 months. And more milk price increases are coming...
From today's WSJ: "On Friday, the Agriculture Department, which regulates the minimum milk prices received by farmers, set the price that processors will have to pay for drinkable milk in July at $20.91 per hundred pounds of milk, up 17% from the June price and up 84% from a year earlier.
In the U.S., some dairy farmers are raising milk prices to offset the higher prices they pay for cattle feed as corn prices rise. Corn is a key feed ingredient.
In May, the average price of a gallon of whole milk in the U.S. was $3.26, up 6.2% from $3.07 a year earlier, according to the Labor Department.
Cheese prices are also starting to rise and Pizza Hut recently raised the price of a regular cheese pizza."