Economists attribute much of the current price hike to sharply higher feed costs. Corn is the primary component of dairy cattle feed, but blistering demand from the ethanol industry is pushing prices higher. According to USDA, 3.2 billion bushels of this year's crop will be used to make ethanol, up 52 percent from last year.
Couple that with higher transportation costs and increased demand from overseas, and you have a scenario that is prompting some to predict milk prices will soar well above $4.00 per gallon later this summer.
Claiming that NON-PASTEURIZED milk offers health advantages over conventional dairy goods, some consumers already pay nearly $7.00 per gallon. But some officials claim raw milk may actually pose health risks. Jeannie Campbell explains.
Jeff Brown, Dungeness Valley Creamery: "Probably the best way to explain it is we never wanted to be more than just a small family farm. 50/60 cows, um, in order to do that ah, we were looking at value added product. And, we didn't want to grow in numbers. So, we wanted to a make our emphasis be on keeping small, keeping quality, and finding a market that was a niche market."
300 miles south in Oregon, is Lochmead Dairy, a family owned operation that employs several branches of the family tree.
Kim Gibson, Lochmead Farms: "ten, eleven, twelve, thirteen family members involved. Full-time."
Milk From 600 cows is processed at the Lochmead Dairy, and then sold in 43 Dair Mart Stores, which also are part of the family owned operation. As general manager of the dairy, Kim Gibson oversees the business built by her grandfather.
Kim Gibson, Lochmead Farms: "We've managed to keep it profitable by diversifying, and, and also by buying just milk from our own herd, and distributing mainly to our own stores. If we were just bottling milk that we were buying from someone else, it would be hard to be profitable.
Lochmead Farms sells a wide variety of milk and ice cream, but does not sell raw milk. Every dairy product they sell is pasteurized.
Nick Furman, Executive Director of the Oregon Dairy Products Commission: "Nobody in their right mind would eat raw chicken because we know that you got to cook chicken to kill the bacteria associated with that meat. I think the same thing applies for milk."
Nick Furman is the Executive Director of the Oregon Dairy Products Commission, a trade group which promotes the state's dairy industry.
Nick Furman, Executive Director of the Oregon Dairy Products Commission: "Heat pasteurization kills bacteria and, renders milk safe. So, as long that's the, the position of, the Food Safety Division in Oregon… As long as that's the position of FDA… As long as that's the recommendation of the American Medical Association… We feel that provides an adequate safety zone for our products in the marketplace.
Despite concerns about the safety of raw milk, advocates believe pasteurization destroys beneficial enzymes. According to the Weston Price Foundation, an organization dedicated to restoring nutrient-dense foods to the human diet, there are currently 25 states that allow raw milk to be sold for human consumption.
Claire Darling, Weston Price Chapter President: "This was milked um, by my farmer that the cow was Pearl."
While it is legal to sell raw milk in Oregon, it must be purchased directly from the producer, and a raw milk operation is limited to just three cows.
Claire Darling, Weston Price Chapter President: "Ummm… Yeah, I ran out a couple of days ago so it has been a while. It sure is good to have it back. I may have to go back to a gallon a week."
Claire Darling is a former vegetarian who has been drinking raw milk for seven years and is the local organizer of the Portland chapter of the Weston Price Foundation.
Claire Darling, Weston Price, Portland: "You know, someone else can do their own research and come up with a totally different decision for their family. And I respect that whole-heartedly. And all I would like is to have the same the respect in the same rights, that if they choose to go to the store and get pasteurized milk, well, I'd like to go to the store and get raw milk.
Nevertheless, officials are concerned over the safety of non-pasteurized dairy products. In 2005, health officials in Washington state traced the source of an E. coli outbreak to raw milk produced by Dee Creek Farm, an unlicensed dairy. At least 18 people became ill and two children were hospitalized in critical condition.
Since then, Washington has required all producers of non-pasteurized milk be licensed by the state and all raw milk must carry a warning label stating the product could contain harmful bacteria.
Rep. Jim Moeller (D) 49th District, Washington: "Raw milk drinkers are kinda committed to drinking raw milk, an-and ah, I felt simply putting in a ban was only gonna drive it, drive it underground."
Representative Jim Moeller, from the 49th District in Washington, introduced legislation after the Dee Creek Farm incident that would eliminate "cow-sharing" -- a loophole that allows consumers to purchase raw milk by owning a share of the animal. There are five states where it is illegal to sell raw milk, but legal to drink raw milk from a cow you own.
Rep. Jim Moeller (D) 49th District, Washington: "We closed the loophole, and we've been working very diligently to make sure they're compliant. They don't want to sell anything that will make hurt people either.
Jeff Brown says that the raw milk he sells now is far cleaner than the milk he provided to the dairy coop to be pasteurized. Though more rigorous safety standards add to his costs, Brown says they are important and good for business.
Jeff Brown, Dungeness Valley Creamery: "If they're doing a good job, then we have nothing to worry about, but if they're not a licensed dairy and they don't know what they're doing, then it's a potential hazard, and an e-coli scare will affect us greatly,"
For Market to Market, I'm Jeannie Campbell.