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Prices for eggs and dairy rise, as production costs remain high

Natasha T / Unsplash

Oklahomans are seeing higher prices for goods like dairy products and eggs in their local grocery stores.

Global issues, pent-up demand from the COVID-19 pandemic, higher feed prices and bird flu are all playing roles in the rising costs. The average cost for a gallon of milk in Oklahoma was $3.76 in March of this year, up from $3.49 in March 2021.

Wholesale price projections for major dairy products, except for dry whey, are raised. The all-milk price 2022 forecast is at a record high of $28.80 per hundredweight, or every 112 pounds, according to the United States Department of Agriculture (USDA). This is $0.75 higher than last month’s forecast.

Derrell Peel, extension livestock marketing specialist at Oklahoma State University, said prices on milk, cheese and butter are all up, but so are feed costs.

“The short answer is that farmers are.. not clear how much their profitability is going up,” Peel said. “They are seeing higher prices for milk, but they are seeing significantly elevated costs of production.”

Peel said prices are higher across the board for dairy products, not just in the U.S. but also globally. He said one of the reasons why milk prices are higher is that milk production has been growing at a slower rate because milk cow numbers are lower this year.

Egg prices are also rising. At least 20 million birds have died because of the bird flu, making it the worst outbreak since 2015 when 50 million chickens and turkeys in the U.S. died, according to USDA.

By itself, Peel said that does not have much impact on the market. But when the outbreak is combined with factors like high demand, feed prices and global issues, it disrupts supplies and leads to higher costs.

“It's strong demand on both the U.S. and a global basis that’s really behind this that’s sort of augmented, if you will, by the inflation,” Peel said.

Anna Pope is a reporter covering agriculture and rural issues at KOSU as a corps member with Report for America.
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