State Dairy Commission to investigate possible milk price fixing

LAS VEGAS (AP) - The Nevada Dairy Commission is investigating possible milk price fixing among southern Nevada grocery stores.

The average price of retail whole milk has remained around $3 a gallon in the Las Vegas area this year despite a decrease of 30 percent to 40 percent in prices paid to dairy farmers over the same period, commission chairman Robert Barengo said Thursday.

The average price in Reno and Carson City this month for a gallon of milk is $2.42. In Winnemucca and Battle Mountain it's $2.91 and 2.98, respectively.

The hearing came on the heels of statistics released by the commission showing Las Vegas has the state's highest prices.

The commission does not regulate or set retail milk prices, Barengo said.

''The price is set by the store, but the stores tell consumers we set prices.''

Commissioners can, however, investigate unfair trade practices within the industry.

That made Genevieve Gilbert, a concerned resident, happy. She recently moved to Las Vegas from Phoenix, where she said milk prices are half what she found in Nevada.

''It just looks like they (grocery stores) are charging together,'' she said.

December prices, posted by the commission last week, show that the average price of a gallon of whole milk in Las Vegas in December is $3.03, up 6 cents from a month ago and the highest average price in the state. The Las Vegas range is $2.28 to $3.89 a gallon in the December survey.

While the commission prohibits suppliers from selling milk below an established minimum, Barengo said there are laws against price-fixing.

''We have to find out if there is collusion in the market,'' he said. ''We're still process of looking at what's going on.''

Retailers blame the continued high prices on increased production costs, transportation and federal and state regulations, said Mary Lau, executive director of the Retail Association of Nevada.

''Las Vegas is a very competitive market,'' she said, adding that area stores have sales on milk periodically.

Lau said the majority of milk distributed in Las Vegas comes from California and Arizona, while more is produced locally in northern Nevada, which keeps transportation costs down.

''The pricing (process) is extremely complicated,'' she said.

Rising energy costs are also squeezing milk producers in California - the nation's largest dairy state and the major supplier to Nevada.

Milk processors rely on natural gas power to process butter, cheese and powdered milk. Their power costs could rise as much as tenfold this winter, according to California Dairies Inc., the nation's second-largest farmer-owned dairy cooperative.

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On the Net:

http://dairy.state.nv.us/