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Abstract

WITH THE HELP of four University of Connecticut graduate students, two weeks ago I surveyed milk prices in 195 grocery stores in southern New England and neighboring parts of New York. The average price for milk in Providence supermarkets was $3.03 a gallon (the average prices for the major Providence grocery stores appear in the accompanying table). Currently, dairy farmers are suffering through the lowest prices in 25 years: $1.06 a gallon in October. Adding insult to injury, retail and farm milk prices have been near these levels for a year. According to Massachusetts Department of Agriculture estimates, the cost of processing milk and retailing it in supermarkets is less than $1 a gallon; so retail prices should be $2 or less. What we have is a virulent case of price-gouging by supermarkets and, most likely, the dairy processors (not the farmers) that supply them.

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