- The Washington Times - Thursday, July 26, 2001

Just when you really could use a scoop, ice cream prices are heading up this summer in stores nationwide.
Parlor owners blame the increases on a new government pricing system, high energy prices and increased demand as the weather heats up. Agriculture Department officials point to a seasonal slowdown in milk production.
The cost of milk fat, the principal ingredient in ice cream, increased 71 percent over the past six months to $2.22 a pound at the end of June. As a result, retail prices are up 4 percent from last year, manufacturers say, triggering a 3 percent drop in consumption.
A new milk-pricing system, adopted in a 1996 farm bill, went into effect in January 2000. It was designed to bring uniformity to covenants that determine how much dairy farmers earn. In the process, the government tied the cost of milk fat to the price of butter, which has nearly doubled since then with increased demand. Wholesale butter prices have soared from $1 per pound in March 2000 to $1.90 per pound in May 2001.
Those changes are rippling through ice cream parlors across Washington, where prices are up about 10 percent in some instances.
Wow Cow, in Bethesda, increased its prices two months ago from $2 to $2.19 for a single scoop, said store owner Michael Rad. He blamed increased milk fat prices, but he also said the price of gasoline has boosted delivery costs.
The story was the same at Deer Creek Ice Cream in Bel Air, Md., where the price of a scoop has jumped 10 cents since the spring.
Deer Creek Ice Cream started paying more for its ice cream mix in May and was forced to raise its prices in June, said store owner Stacey Grafton.
“The price of milk is going up in the supermarket,” said Mr. Grafton. “I put two and two together.”
Ben & Jerry’s ice cream company raised the price of its ice cream pints by 4 percent in April due to the increase in milk fat prices, said Lee Holden, the company’s spokesman. On a retail level, the popular pints now cost about 10 cents more.
Ben & Jerry’s is monitoring the price of milk fat very carefully, said Mr. Holden, who hopes the prices go down.
The company is reducing expenses and trying to increase sales, he said, and fortunately this is the company’s peak season and business is strong.
Meanwhile, many individual chain store owners are resisting price changes for consumers even as merchants pay more.
Haagen-Dazs customers are not paying any more than they did last year, said Tom Hughes, operating manager of the Union Station parlor. Although his store has not raised prices, Mr. Hughes said the 2.5-gallon tubs of ice cream he purchases have gone from $30 to $31.
Mr. Hughes cited the cost of transportation and Haagen-Dazs’ growing manufacturing costs as reasons for the price increases. Because Haagen-Dazs ice cream is made in California, where electricity prices have soared, the company has been forced to raise prices a dollar per tub.
Baskin-Robbins’ consumer prices are also staying the same, said College Park store manager Vijay Patel.
Shaq Qureshi, the owner of three Dairy Queen ice cream parlors in Alexandria, Kingstown and Landtown in Virginia, dismissed fears that ice cream costs will continue to rise.
Milk prices go up every summer and they always go down again in the winter months, he said. He has not raised prices and will not unless prices continue to climb every month, even into winter.
“Every summer the price goes up, then slowly it goes down,” said Mr. Qureshi, who has been in the ice cream business for six years.
There are so many other factors at work that to pin an increase in ice cream prices entirely on an amended dairy farm bill is not accurate, said Department of Agriculture spokesman Jerry Redding.
“In the summertime when it’s hot, cows don’t give much milk,” Mr. Redding said.
He noted that all dairy goods prices are higher this summer, mainly due to supply and demand.
“More people are eating,” he said. “Any number of things could have caused the demand.”
This article is based in part on wire service reports.

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