California Farm-Retail Milk Price Relationships

Milk pricing in California is often controversial. Consumer advocates and their organizations periodically charge that retail milk prices are “unfair” or “too high” and call for public intervention in the fluid-milk market. The consumer view is expressed by Consumers Union, which after conducting surveys of retail milk prices in Los Angeles and San Francisco area food stores, charged that large supermarket chains were “gouging” consumers and that this gouging was the primary cause of surging retail milk prices that were leading to an increasing gap between the price per gallon received by farmers and the price paid by consumers. A 1997 Consumers Union press release based on their price surveys observed that: