As projected, farm-level milk prices are dropping and retail prices should follow if suppliers respond.

For the second month in a row, the farm-level price for bottled milk will drop Sunday by 28 cents from July. That's a decrease of 56 cents from June, when milk prices climbed to a record high.

At $1.48 per gallon, the wholesale bottled milk price for August is down 27 percent from June, the National Milk Producers Federation said. The drop in prices likely will be passed along to consumers, but local retailers aren't seeing a change yet.

Hy-Vee Foods said retail milk prices haven't started declining much since they peaked at $3.63 per gallon this month. In May, prices ranged from $2.69 to $3.09. That's up about 20 cents from April. Still, consumers have not reacted much to the change in price because milk is a necessity, officials say.

"I saw that they went up a little bit, but I'm not a big milk drinker to begin with, so I wasn't really effected," said Christine Hake, 19, a University of Iowa junior from Northbrook, Ill. "It's a good thing that they're going down."

The reason for the milk price increase at the farm and retail levels is because supply was not keeping up with demand, said Christopher Galen, spokesman for the National Milk Producers Federation.

One year ago, dairy farmers experienced the lowest prices in 25 years. As a result, farmers left the dairy business or reduced herd size, production or input costs, and changed management style to save money, Galen said.

However, since May, the number of cows has increased, corn feed costs have dropped and the dairy market is turning around, Galen said.

Nationally, farm milk prices are dropping and the retail price decline should be more noticeable in the coming months, depending on whether retailers make the change, he said. The national average drop in retail sales has been 3 cents.

Paul Heyn, owner of Heyns Ice Cream, 811 S. First Ave. in Iowa City, said prices for single and double scoops went up 10 cents, but he absorbed most of the costs from milk wholesalers. Other ice cream ingredients have similar fluctuation in costs, he said. Just this month, he paid $266.01 for a gallon of vanilla extract because of storms that hit Madagascar. Typically, a gallon of extract costs about $55.

"I have yet to see any prices from wholesalers go down, but I'm eagerly anticipating it," Heyn said of milk prices.