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 50 percent this year -- driven by higher costs of transporting milk to market and increased demand for corn to produce ethanol.

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

Hutjens and others said higher fuel prices have increased the cost of moving milk from farm to market, and corn -- the primary feed for dairy cattle -- is being gobbled up by producers of ethanol. The USDA projects that 3.2 billion bushels of this year's corn crop will be used to make ethanol, a 52 percent increase over 2006.