Milk prices in the United States will dramatically increase this month, raising the cost per (American) gallon by 50% compared to a year ago.

The California Department of Food and Agriculture (CDFA), for instance, has blamed the jump on BSE closing the Canadian border to live cattle, reducing dairy cow exports. Many farmers also sold their cows for slaughter during record low milk prices in 2002 and 2003. Also, feed has been expensive, scarce and of poor quality because of drought. 

The CDFA predicts prices will fall later, saying the price rise will boost farming profits to a level where lenders are more comfortable investing in expansion plans, increasing US dairy supplies.