North Texas dairy farmers losing in milk wars

North Texas consumers are finding a rare silver lining to the recession.

A milk war has begun.

Competing supermarket chains are slashing prices on milk due to a worldwide dairy glut caused by factors including the economic downturn and import cutbacks by China. And milk producers in Texas’ big dairy producing areas near Stephenville, Sulphur Springs and in the High Plains are being hurt.

In some cases, retail milk prices have dropped 35 percent to 40 percent from a year earlier.

Through Tuesday, Minyard’s Sack’n Save is selling milk at $2.58 a gallon. Market Street in Colleyville is competing with a $2.50 price tag and Safeway-owned Tom Thumb sweetens the offer by a penny at $2.49.

Exploiting the cost advantages of running its own milk plant near downtown Fort Worth, Kroger advertised milk at $2.25 a gallon but was out-maneuvered by Albertsons, which sold $1 half gallons from Dean Foods-owned Schepps Dairy of Dallas. That works out to 25 cents cheaper per gallon.

A savvy milk buyer named Jean Wilson wheeled her grocery cart out of the Kroger at Altamesa Boulevard and McCart Avenue with two gallons.

"Albertsons is cheaper this week, but Kroger’s is more convenient for me," said Wilson, 70, a retired Army Corps of Engineers employee. "I watch the prices."

"Kroger has been using milk as a loss leader [special], and we consume three or four gallons a week," said Wilson, explaining that she and her husband are big milk drinkers, and that consumption climbs when a grandson spends time with them.

Dairy farmers like seeing North Texans drink more milk.

But many of the state’s producers are losing money on every gallon consumed, finding themselves wedged between high-cost feed contracts, low milk market prices and an inability to stop their Holsteins from producing ever more milk, said Grapevine-based G.H. Cain of Dairy Farmers of America, a farmers’ marketing co-operative.

"We can’t just switch them off at 5 p.m. on Friday for the weekend," said John Traweek of Stephenville’s Jam Dot Dairy.

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