Dairy Prices are Back Up

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By Stacy Lilienthal

Story Published: Feb 18, 2010 at 12:23 AM PDT

NATIONWIDE --- You've probably noticed it at the store that a gallon of milk costs more.

Nearly a year after the record price drop, milk product prices are back up. The average price of a gallon will now cost you about $3.50. "All of a sudden it has just jumped and I don't know why," Lenora Nowlin said after noticing an increase in cheese and milk prices.

We looked at why and found the USDA believes it's because of simple supply and demand. More farmers went out of business and are producing less milk. So that's driven prices up. The U.S.D.A. expects cheese to cost about 30 cents more than last year and butter to be about 25 cents more than last year.

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