Cost analysis: Powdered vs. fresh milk

I have bought powdered milk for about 6 years, but only recently did it occur to me to take another look at whether it results in any cost savings.  When we drink milk, we drink fresh milk, but our primary dairy comes from the powdered milk we put in our quick cook oatmeal every morning.  When we first started buying it, it saved us money.  Does it still?

Cost Analysis:

We can buy a gallon of milk at Trader Joe’s for $2.99.  At Fred Meyer, it costs $14.89 per 4 pounds of powdered milk, which makes 5 gallons or 20 quarts.  That comes out to $2.978 per gallon, which is a little more than 1 cent per gallon savings.  Not terrific.  However, just the other day 4 pounds were on sale for $13.56, which comes out to $2.712 per gallon, or more than $.27 per gallon savings.  This is nicer.

There are 16 cups per gallon, and we normally use 1/2 cup per bowl of oatmeal = 32 servings per gallon.  We can get 160 servings out of 4 pounds of powdered milk.  Assuming that we go through the full container in the next 3 months (or 11.4 weeks), we will save $1.39 over that time.

If I keep buying Fred Meyer dry milk at the usual price, I will save $0.06 every 3 months.  If we buy Walmart brand dry milk online (along with other goods to equal free shipping), it will cost $13.68 for 4 pounds.  Total savings: $0.254 per gallon, or $1.27 approximately every 3 months.

Bottom Line:

It is cheaper overall to buy powdered milk, but not that much cheaper.  The main pros are that it’s convenient (takes less time to cook than cold fresh milk), portable (my husband can take the dry ingredients to work, and we can take it camping), and lasts a really long time so we rarely ever experience spoilage.  The possible con might be that it’s not as healthy as fresh milk, but I haven’t really found anything conclusive on that.  Powdered milk is just one small cost cut that adds up to bigger cuts in our grocery bill.

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