Milk prices rise and fall over the years, but prices have skyrocketed recently, affecting the pocketbooks of local consumers when they grab a gallon in stores and benefitting local dairy farmers.

The reason behind the rising cost of milk can be boiled down to a couple factors - supply and demand and rising fuel and feed costs.

"If you see gas prices go up, naturally everything goes up. That's the lifeblood of the whole economy," said Mark French, executive director of the Nevada State Dairy Commission. He said Nevada is home to 35 dairy producers, with 26 residing in Churchill County. A hit on fuel prices translates to a hit on milk prices.

Local resident Bill Christoph, partner in the Liberty Jersey Farms Dairy, said a year ago he was receiving about 10 cents less per gallon than it cost to produce the milk.

"It's shot up over the past few months," he said. "It's a boom or bust type of thing."

He said while he's been able to weather the roller coaster price ride, it's difficult for newer producers to stay afloat while trying to keep up with large loan payments.

Milk producers are paid per "hundred weight" or 100 pounds of milk, represented by CWT. Current figures from the state dairy commission show producers in Western Nevada will receive a record $22.99/CWT for milk in July. Last year at this time, the price was $12.37. Over the past 10 years, the price has fluctuated monthly from a low of $11.63 in April 2003 to next month's high, with no apparent seasonal ebbs or flows to the market price.

French said the state commission does not set the retail price of milk, just the base price paid to producers. Nevada law states that minimum pricing for Western and Northern Nevada milk is determined each month by the State of California Department of Food and Agriculture, while the price for milk from the Eastern Nevada marketing area is set by the Federal Milk Marketing Orders. Since California sets it own prices, Nevada follows suit.

"We've always been based on the California market because that's where a lot of producers send their milk and they're our competitor," French said.

Nevada is home to three milk processing plants for fluid milk - two facilities in Las Vegas and Model Dairy in Reno. A new milk plant is set to open soon in Yerington, French said. There's also a large Breyers ice cream facility in Southern Nevada.

Local dairyman Christoph said most producers in Churchill County belong to the Dairy Farmers of America, or DFA, a fact French confirmed. Of the milk collected here, 25 to 30 percent is taken to Model Dairy in Reno, Christoph said, with the remaining milk split between Las Vegas, California and even Texas bottling plants.

Christoph said DFA handles the logistics of arranging pick up and delivery of the milk every day - a necessity because he doesn't have the capacity to store milk for more than one day. His dairy of 390 cows produces 30 million pounds of milk per month, or 3.4 million gallons.

Mark Verbon, the terminal manager with Jim Aartman Trucking, said his company services 27 dairies in Churchill County on an around-the-clock schedule. He said a fuel surcharge is included into the trucking company's contract with the Dairy Farmers of America cooperative.

"Fuel prices are so erratic that something had to be built in," Verbon said.

The Daily Fuel Gauge Report, published by the AAA, shows diesel prices for California currently run from $3.07 per gallon to $3.25. In the fall of 2005, diesel prices posted record highs, stretching from $3.16 to $3.31 per gallon.

But the price of fuel isn't the only force behind rising milk prices. The rise in corn costs also affects producers in the pocketbook, a cost that's passed on to consumers.

"You've got to look at feed costs and corn. Eleven percent of the corn crop is going to ethanol this next year and that's killing the dairymen," French said.

Many farmers who traditionally grow alfalfa may switch to raising corn to reap the profits, creating a shortage of alfalfa and raising its cost, French said.

A year ago, Christoph was paying less than $140 a ton for corn. Now, the price is over $200 a ton.

"It just drags everything up," he said.