This post is featured in the July 21 Festival of Frugality.

There are some tricks and techniques that our parents and grandparents used in their efforts to be thrifty (“thrifty” is the “old school” word for “frugal”) that just don’t work today.

Sometimes, the products that were used a generation or two ago are no longer available or the formulations have changed. Sometimes, scientific research has proven certain techniques are not consistently safe. Sometimes, there are better products now on the market.

And sometimes, the cost difference isn’t what it used to be.

Today’s example: powdered milk. My parents used powdered milk on us kids’ cereal when we were on camping trips in the 1970s. My husband remembers his parents using powdered milk when money was tight for their family in the 1960s. It was a common trick among many families to mix powdered milk with fresh milk so to deal with the powdered milk taste problem while still getting the savings.

Here is a box of powdered milk at the Food Town store in Monroe, Mich., today. The Spartan brand is usually a very inexpensive private label brand as compared to name-brand products. I’ve bought quite a few Spartan groceries over the years.

As you can see from the picture, the box will make 8 quarts of milk and it was on sale this week for $8.45 a box.

Translated: this box makes 2 gallons of milk at a cost of $4.22 a gallon.

To compare, fresh milk prices in Monroe, Mich., have been ranging from $2.50 to $2.75 a gallon in recent weeks. Meijer actually has milk for $1.75 a gallon this week.

What happened?

The Wise Bread blog has a price chart and some background at Nonfat dry milk – no longer a frugal alternative. One of the reasons cited in that article for the increase cost has been increased international customer demand for dry milk.

Since Wise Bread wrote that piece in 2007, American consumers have been rattled with a recession and retailers are noticing the changes in purchasing habits. One of the ways the retailers are using to keep customers coming in the door is to lower prices on products that get consumers’ attention.

Why do you think the milk sales are featured so prominently in the grocery fliers?

So what are some possibilities for families on a budget to deal with the cost of milk?

• Some people freeze milk. The USDA says it can be done. But I prefer to use my limited freezer space for meat, cheese, bread and veggies.
• Plan your food choices around milk prices. Some recipes and dishes are very milk-hungry such as casseroles, pudding and custards. Make those items when milk prices are low, and avoid them when milk prices are high.
• Ration the milk allowance per serving. Did you ever notice that the serving suggestion for milk with a bowl of dry cereal is 1/2 cup? Set out the measuring cup that is marked 1/2 cup and show the children how to pour that much and no more. I’ve also trained my husband not to fill my tall beverage glass to the rim with milk when he sets the table for dinner. I won’t drink that much milk at one time, and end up dumping what’s left down the drain.
• Ration out your milk purchases. There are a lot of families these days who rely on food stamps or once-a-month checks to get by. Families who are dealing with that situation can set aside cash in an envelope – or leave enough money in their food stamp account – with the sole purpose to get a fresh gallon or two of milk every week.
• Keep appealing alternatives handy. Iced tea, cold water and lemonade mix all are very inexpensive beverages. Get powdered creamer if your only purpose for milk is to put it in your coffee (however, since I do keep milk in the house for other reasons, milk is more cost-effective than creamer for my coffee.)

Now, back to that powdered milk. If you really drink milk so rarely as to use maybe a quart a week, then do the math and it may be worth your fuss to get dry milk instead of fresh.

It’s also still a convenient option for camping and emergency supplies.

However, there is another product that also works well for camping and emergency supplies. It is called shelf-stable milk. Hershey reports its shelf-stable milk products are available at Spartan grocery stores in Michigan and Ohio. Angel Food Ministries also has been including shelf-stable milk quarts in its basic monthly food boxes, and so I’ve had reason to try the Borden brand and one other brand.

At first, I gave that milk away via a food pantry basket because I was puzzled by it. Then I decided to keep the self-stable milk for when my gallon milk ran out and I wasn’t ready to make a store run.

I found out that the shelf-stable milk is pretty good. It does have a slightly different taste but it’s not bad, and is certainly a big improvement over powdered milk.

I haven’t seen the shelf-stable milk prices at the local retail stores, although from prices I’m seeing on the Internet the cost per ounce is comparable to powdered milk. If any of my local readers have seen it, feel free to provide the cost information in the comments.

But if you only need or want a quart or two anyway on your pantry shelf to use during a power outage or snowstorm, shelf-stable could be a better alternative to a box of powdered milk that won’t get used up as fast.

Remember: if your family doesn’t like the taste of powdered milk, they won’t drink it.

And these days, that’s a waste of a lot more money than it used to be.

(Update on July 23: This post is getting a huge amount of links and hits. If you are interested in saving money on groceries, be sure to check out the tips at my grocery shopping sidebar and the eight week plan companion piece.)