In the manufacturing sector, we've been experiencing this for some time. Powdered whey protein prices started out around $2.50/pound at the beginning of the year, peaked around $7 back in August/September, and are now slowly coming down again but still holding at more than double where we began.

Considering that whey is a secondary product from making cheese and that the commodity market for milk went up about 1 month prior to when we started seeing the spikes, I'm surprised it wasn't noticed earlier. Please also keep in mind that the prices for milk are regulated by the government.

Another thing to add to your well written article - you failed to mention the growing demand in Mexico, Japan and China for domestic and EU milk which is diluting supply as well. I recall an article that Germany was complaining about the new increased demand to China, as it had the same effect there as we see here.

Also, when the spikes began to occur, another common refrain I heard from suppliers was that ethanol production was cutting into supply for feed - can't validate this or not, but it sounds nice.