Twinkies aren’t the only thing in scant supply.
A worldwide milk shortage is expected to hit this spring, according to a new report, causing the price of a gallon of milk to spike by more than $1 here.
The milk shortage would be the first in nearly three years, caused largely by wacky global weather that has contributed to higher feed costs and disrupted dairy herds on three continents.
“We anticipate that there will be a worsened supply side,” said Tim Hunt, the global dairy strategist in New York for Rabobank in a report released yesterday.
The growth rate of raw milk production during 2012 of about 1.1 percent globally is likely to reverse next year, with Hunt predicting a decline of 0.9 percent in a “collapse of the milk market.”
Sharp price hikes of 24 percent in the wholesale price of raw milk could hit by the second half, climbing to around $1.70 a gallon, up from an average of $1.30 a gallon in 2012, Hunt estimates.
The retail price of milk is often triple the cost of raw milk because of processing and price-setting by states and the federal government.
That means a gallon of milk in New York City that retails for $4.29 could hit $5.39 a gallon by summer.
Dysfunctional Washington politics has added to the soured outlook.
The dairy industry is headed for its own fiscal cliff on Dec. 31. If Congress fails to pass a new farm bill, the government will be forced to buy milk at much higher prices — nearly double the current market rate.
At the same time, milk consumption has been on the decline in the US. Last year, Americans drank 3.3 percent fewer gallons of milk, in part because of higher prices.