Price of summer treat headed higher

PHOTOGRAPHER: Stephen Williams

Stewart’s Shops is paying more for the milk it buys from farmers and the gasoline and diesel fuel it uses. Now its customers will be paying more for scoops of Crumbs Along the Mohawk, Death by Chocolate and Philly Vanilla.

The 328-store convenience store and scoop shop chain has raised the cost of a single-scoop cone or dish to $1.99 from $1.75. A double-scoop cone went from $2.25 to $2.49.

Prices for other ice cream products, such as half-gallon cartons, have also been increased.

The ice cream prices are being raised because Stewart’s is facing higher costs, company spokesman Tom Mailey said.

And while the chain, headquartered in Malta, sells a lot of ice cream, it isn’t alone in charging more for dairy products.

Farmers across the nation are getting more money for their milk — good news for dairy operators who have struggled through the recession and a decade of yo-yo pricing, but a factor driving consumer prices higher.

Companies like Stewart’s are paying more to farmers because the government-set price of raw milk has increased. Stewart’s also faces higher transportation costs for collecting milk at local farms, processing it, and delivering the milk and ice cream products to its stores, Mailey said.

“On a lot of different levels, there are higher transportation costs,” Mailey said.

In making ice cream, the company also faces higher costs for commodities that go into specific flavors — like cocoa, which has been driven higher in recent months by political conflict in Africa, where much of it is grown.

Mailey said Stewart’s probably should have raised ice cream prices sooner, but there was some hope commodity costs would come down.

“You want to have rational pricing,” Mailey said. “You don’t want to see it roller-coaster up and down.”

While the hike in ice cream cone prices has drawn a lot of people’s attention, prices for a variety of other dairy products like milk, cheese and yogurt have been rising gradually in recent months, across the Northeast and across the nation.

Dairy farmers are getting almost twice as much money for their milk as two years ago, when record-low prices were driving even multi-generational family farms out of business. The current milk price in most of the Northeast is about $22.74 per 100 pounds of milk, with some variance by region.

The price is established monthly by the federal government, using a complex formula that considers supply and demand and other factors. A hundred-weight of milk is equal to roughly 11 or 12 gallons of milk.

While farmers were losing money at a price of $12 per hundred-weight two years ago, milk prices have been rising for more than a year. It was $17.25 per hundred-weight a year ago, and $20.69 last November, according to U.S. Department of Agriculture figures.

The current higher prices are good news for farmers.

“We’re very pleased with the milk price back to the farmer right now,” acknowledged Peter Gregg, a spokesman for New York Farm Bureau.

But he cautioned that dairy farmers also face the same higher fuel costs as everyone else, the grain and corn feed prices they pay are also higher. Farmers are well aware that milk prices could plunge again.

The low prices in 2009 forced dozens of long-time dairy operations out of business, as even large and well-managed farms were losing money.

“Yes, milk prices are favorable right now, but a year from now they could be back in the toilet,” Gregg said.

The Farm Bureau hopes to see some reforms of the roller-coaster pricing system that has affected farmers’ finances when Congress writes a new farm bill in 2012.

Stewart’s, which sells about 3 million gallons of ice cream a year, buys all its milk from 37 farms in Saratoga, Washington and Rensselaer counties, Mailey said. The milk is processed at a company-owned milk processing and ice cream plant in Greenfield, then sold in stores across eastern New York and into Vermont.

Mailey said Stewart’s pays its farmers a premium price above whatever the established monthly price is.

The price increase is coming as warm weather arrives. Stewart’s sees its ice cream sales spike upward in the summer, when it generally introduces new and temporary promotional ice cream flavors.

“We will definitely see an increase in sales in the touristy areas. Summer is the time of year for ice cream,” Mailey said.

Retail milk prices can be expected to continue tracking with whatever farmers are being paid.

New York state has a price-gouging law, enforced through the Department of Agriculture and Markets, that prevents retailers from charging more than 200 percent of the price being paid to farmers. Most retailers sell milk at close to that 200 percent markup, Gregg said.

“Historically, consumers are still getting a bargain for milk,” Gregg said.