Price evolution of milk in the United States

1. Relevance of the price of milk
2. Price evolution of milk
   1. Absolute price of milk per year
   2. Inflation adjusted price of milk per year
3. Conclusion
4. FAQs about milk's price in the the United States
5. Price evolution table and full chart

Milk is considered a basic food item and a key source of nutrition for many people around the world. But that’s only one of the reasons why the price of milk is important.

The price of milk influences the price of all dairy products, including cheese, butter, and yogurts. This means that an increase in the price of milk can have a huge impact on the amount of money the average consumer spends at the supermarket, even if they don’t buy milk directly.

The price of milk can be affected by several reasons, including supply and demand imbalances, a raise in production costs, or even arbitrary government policies.

One way or another, the price of milk has become an indicator of overall economic conditions and is used to calculate important economic indicators, including CPI calculations, average baskets of goods, and even inflation itself.

Price evolution of milk

The average price of a gallon of milk between 1995 and 2022 was $3.14, with the lowest price being $2 in 1995 and the highest $4.09 in 2022 (at least within the timeframe we have data for).

Yes, I'm sorry to say, but milk in the United States has never been as expensive as it is today. However, if you look at the inflation adjusted price, a gallon of milk actually peaked in 2008 at $5.36 (in today's money).

Let's take a closer look at the data in the tables below:

Absolute price of milk per year

The absolute price of milk in the the United States has gone from $2 in 1995 to $4.09 in 2022. That's an absolute increase of $2.09, or 104.5% in a period of 27 years. (go to the next section for inflation-adjusted values).

This increment has not been linear though. During this period of 27 years the price of milk actually decreased year over year 10 times, in 1997, 2000, 2002, 2006, 2009, 2012, 2013, 2015, 2016, 2018.

The biggest absolute price decrease in the price of a gallon of milk was in 2009, when the price dropped by $-0.69, or -18.16%. The biggest price increase was $0.62, or 31% in 1996.

So yes, it's had its ups and downs, but overall, price increases outweight the deceases, making milk pricier than it used to be.

Inflation-adjusted price of milk per year

As accurate as the information above might be, it can also be somehow deceiving. This is because the value of money changes over time, usually decreasing. That means that $1 of today's money cannot buy as much as $1 in the past. This phenomenon is called inflation, and can make it complicated to compare historical pricing data. Luckily, we can adjust for it and calculate what a dollar value of the past would be equal to in today's money.

So let's not take a look at the evolution of the price of milk in the the United States, in that same 27 years period between 1995 and 2022, but adjusting prices to inflation (aka. in today's money).

When we adjust for inflation, we see that the price of milk actually peaked in 2008, when it cost $5.36 (in today's money), and was at its lowest in 2018 when it sold for $3.46.

The biggest drop in adjusted price happened in 2009, when the inflation-adjusted price dropped by $-1.13 (-21.08%). Even when adjusting for inflation, the biggest price increase of milk was still in 1996. However, the $0.62 jump actually felt like $1.08 to the consumer due, to the effect of inflation.

The average price of milk during this period of time, adjusting for inflation, has been $4.50, and the most current price of $4.09 is 9.11% below that average. Enjoy it while it lasts!

Conclusion

The absolute price of milk has increased by $0.60 ($17.19%) in the last decade, and $2.09 (104.5%) since 1995. But that comes as no surprise, as prices always tend to increase over time due to inflation.

Now, as we've explained earlier, the absolute price of a product does not necessarily represent its affordability fairly. For that we have to look at its inflation adjusted price, or in other words, the price evolution in today's money.

When we look at the inflation-adjusted price of milk, we see that it has varied ± 21.09% over this period of time, and is currently 9.2% cheaper than the average over these years.

Even when adjusting prices for inflation, milk prices are still higher in 2022 than they were in 1995. Although, considering the complexity of the economy, that price increase is not huge.

We can consider that the price of milk has remained maily stable over this period of time. It sure had some ups and downs, like in 1996 and 2009, but considering the magnitude and complexity of the global economy its price has mainly kept up with inflation.

FAQs about the price of milk in the the United States