Despite rock-bottom price, don’t buy GM stock

Why does milk cost more than gasoline? All you have to do is milk a cow. Look at what you got to do to get a gallon of gasoline. Strike oil, drill for it, ship it to refinery and refine it. I suspect that there is a force keeping the price of gasoline low.
— M.C, Center, Texas

Based on the routine howling that floods our Inbox every time gas prices tick a few cents higher, I'm not sure many readers would agree with you that the system of gasoline production in the U.S. is designed keep prices low.

But it’s true that, as of the latest data available, a gallon of milk cost more than a gallon of gasoline. According to the latest figures available from the Bureau of Labor Statistics, a gallon of fresh, whole, fortified, milk set you back $3.08 in the month of April, while a gallon of unleaded regular cost just $2.06. (Note to readers: Before firing off an e-mail informing us that these prices have nothing to do with the prices you pay, we’ll take this opportunity to remind you that these are national averages.)

I’ve never worked on a farm, and I’m going to take a wild guess that M.C. hasn’t worked on one either. It turns out there’s a little more to producing a gallon of milk than just milking the cow.

To produce that gallon of milk you have to buy a farm, buy or breed some cows, feed the cows, pay the vet bills when they get sick, buy or lease the trucks to haul supplies, keep those vehicles fueled with diesel or gasoline, fix the vehicles when they break down, mend the fences so the cows don’t walk away, pay the utility bill to keep them warm in the barn, pay the mortgage on the barn, hire people to help you with all this, pay those worker’s payroll taxes, pay taxes on your farm and pay the freight to get your milk to market. It adds up.

In fact, according to the Center for Dairy Profitability at the University of Wisconsin (where they have lots of dairy cows), the average annual cost of keeping a dairy cow in 2007 (latest figures available) was $3,259.38.

Also in msnbc.com business Companies scale back, cancel holiday parties Answer Desk: Overpaid and bailed-out at banks? Your Career: ADA expands to cover more workers Venza sorta-crossover is Toyota’s latest mistake   Video: Green motorcycles are born to be mild

MORE FROM ANSWER DESK

Answer Desk Section Front

Who needs overpaid bankers? Who gets extended jobless benefits Easing job losses point to wobbly recovery Long-term jobless face frayed safety net GDP growth overstates case Recession over? Readers don't believe it Breaking down the cost of health care Commercial real estate bust looms 'Official' job numbers don't tell the whole story Getting mortgage help Answer Desk Section Front   Add Answer Desk headlines to your news reader: