We’ve already noted that ethanol is jacking up the cost of corn, hurting the poor who spend nearly 40% of their income on food.

Now it’s milk.

Dairy market forecasters are warning that consumers can expect a sharp increase in dairy prices this summer. By June, the milk futures market predicts, the price paid to farmers will have increased 50percent this year – driven by higher costs of transporting milk to market and increased demand for corn to produce ethanol.

U.S. retail milk prices have increased about 3percent, or roughly a dime a gallon, this year, according to the U.S. Department of Agriculture.

But University of Illinois dairy specialist Michael Hutjens forecasts further increases of up to 40cents a gallon for milk during the next few months, and up to 60cents for a pound of cheese.

That would drive the cost of a gallon of whole milk around the country to an average of $3.78, based on the USDA’s monthly survey of milk prices in 30 metro areas.

That’s more than a gallon of gas! Where’s the price gouging law for milk?

The USDA doesn’t survey prices in California because the state sets minimum farm-level prices, skewing retail dairy prices. But those retail prices are near $4 a gallon in many cities there, too.

Say what? California sets a minimum price?

Yes, the state fixes the price of milk. If a store sells below that price, the state sends in the muscle.

As for the poor? Let ’em drink water.