Dairy Farm Interview Question:

Who sets the price of milk at the grocery store and how much does the farmer receive?

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Farmers do not set the milk price. Wholesale and retail prices are determined by a complex formula of supply and demand, along with other factors. There is often a variance in the retail price of milk from store to store, and from city to city. This is because grocery retailers, mass merchandisers, convenience stores and drug stores determine their retail prices differently, taking into account processing, transportation and marketing costs. According to recent USDA data, on average, dairy farmers receive about 30 cents of every dollar consumers spend on food.
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