Gas Prices Drop, So Media Has Some Dairy

Gas prices have dropped 24 cents in a month, so where does ABC shop for bad economic news? In the dairy case, of course.

"The price of milk in America is about to go up and go up again, a lot," said World News Tonight anchor Charlie Gibson ominously. In the background, stood graphics eerily similar to those ABC has used the past several months about high gas prices.

With lower gas prices, ABC News correspondent Betsy Stark has resumed her role of reporting the worst of consumer hardships — having reported extensively on the housing market, the minimum wage and gas prices. "This summer the pain at the pump is giving way to grousing at the grocery store," quipped Stark during the on June 27 broadcast.

Though milk prices have increased, average regular gas prices have fallen 24 cents since May 25 according to the federal government's Energy Information Administration. Despite that month-long decline, ABC's evening news has only reported on it twice — on the June 4 and 11 broadcasts.

"For many families, milk is as much a necessity as gasoline," added Stark. But are Americans really going to endure the same type of hardships over higher milk prices compared to higher gas prices? According to consumption statistics, it won't even be close.

In 2005 (the latest year for which statistics are available), consumers spent only $378 on average on dairy products according to the US Department of Labor. Compare that to the $2,013 Americans spent on average on gasoline in 2005 according to the same report.

Stark also suggested milk prices could be feeling pressure from the increased demand on the global economy. "But it's not just the high cost of dairy farming driving up prices," said Stark. "Global demand is growing as more Chinese and Indians add milk to their diets, while global supplies are shrinking — hurt by a drought in Australia, one of the world's top milk exporters."

However, milk isn't exactly the global commodity that oil is. In fact, the United States imports dairy products on a limited basis and milk imports are strictly restricted. The United States exported $1.89 billion in dairy products in 2006, only a small fraction of the $26.7 billion domestic annual dairy industry.