Retail-milk prices don't reflect farm prices

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An article in The Wall Street Journal on Monday suggested that consumer price-gouging may be going on in the dairy aisle.

Retail milk prices have hardly declined, despite a big decline in the price of milk received by farmers, the article points out. In the 20-month period from September 2001 to June 2003, raw milk prices on the farm declined 35 percent, while the average price of whole milk in the grocery store declined just 9 percent. And, in some places, such as Boston, whole milk prices have hardly budged at all.

One possible reason: Less competition due to consolidation within the supermarket industry.



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