As consumers continue to grapple with high food prices triggered by the recent drought and the ailing economy, milk will soon be added to their list of costly staple foods. Dairy farmers are currently facing production shortages and will likely run into supply issues in the coming months. Consequently, some dairy processors are already paying commercial farmers 60 cents more per litre on average for milk to ensure consistent supply in winter. Poor pasture conditions due to the drought and the sharply higher grain prices have squeezed margins at farm level and the increase should help improve the situation. The price is expected to further increase in May and will hike operating costs for the entire milk value chain, leaving retailers with no choice but to increase the price that consumers pay for milk and dairy products. Paul Makube , Senior Agricultural Economist at FNB says the price of milk is determined by demand and supply from the market. However, because dairy farmers are pric...