Editorial: High milk prices are troubling

Wednesday, Dec. 27, 2000 | 9:54 a.m.

Genevieve Gilbert, a new resident of Las Vegas, is pleased that state officials have launched an investigation to see if Southern Nevada grocery stores are colluding to fix milk prices. After all, as Gilbert told the Associated Press last week, the price of milk in her former hometown of Phoenix was about half of what she pays here.

It is extremely difficult for the government to prove when companies engage in price fixing. Often what happens isn't a conspiracy but a situation where competitors constantly monitor each other's prices, and if there is no noticeable letup in consumer buying, then they all will keep their prices higher than what otherwise would be the case. Still, despite the daunting task ahead of it, the Nevada Dairy Commission did the right thing last week when it decided to undertake its probe.

The disparity in milk prices within Nevada is striking. The average price in Reno-Carson City for a gallon of milk is $2.42 this month, but in Las Vegas the price is $3.03. In September the price gap between the two regions was even wider, with Las Vegans paying 80 cents more for a gallon of milk. Dairy farmers aren't sharing in the windfall since the prices they're paid haven't gone up. A spokeswoman for the grocery stores claims that production costs, transportation and regulations have resulted in the continuing higher prices in Southern Nevada.

While price differences among products sometimes happen between Northern Nevada and Southern Nevada, such a huge gap in the price of milk doesn't make sense, especially since other food items don't have such sizable disparities. What appears to be occurring is that the grocery stores have found that while customers don't like higher prices, they still are willing to pay more for milk. But milk is a staple and it is unconscionable that families with smaller incomes should have to pay an exorbitant price for an essential ingredient of a healthy diet.