WATERVILLE – The price of milk is going up in Maine, giving dairy farmers relief and causing consumers to pay more.

The minimum retail price for a gallon of whole milk will be $3.59 in July, according to the Maine Milk Commission, which oversees the milk industry and sets minimum milk prices. That’s up from $3.36 this month and $2.68 a year ago.

Stanley Millay, the commission’s executive director, said the higher prices are good news for dairy farmers, who have struggled with low prices for years. The average price paid to farmers in May for 100 pounds of milk – or 11.6 gallons – was $18.60, up from an average of $13.53 for all of 2006.

“I think farmers are happy right now,” Millay said. “They’re getting to the point where they’re optimistic. If things stay where they are, that’s good.”

Tammy Harris of Winslow didn’t think it was so good that she was paying $4.19 a gallon for store-brand milk at a Shaw’s supermarket in Waterville.

“It was so cheap before,” Harris said. “Who can afford that, especially for low-income families like myself who are struggling and who can’t get assistance?”

It’s not just the price of milk that’s going up, Harris said. Other dairy products like butter, cheese and yogurt are too.

Deborah Nielsen of Waterville, who was also at Shaw’s, said she doesn’t have a problem with higher milk prices.

“The farmers need it,” she said.

Darryl McKeen, who operates a 100-acre dairy farm in Albion with his wife, said it’s still tough to make a living as a dairy farmer. Diesel fuel is more than $3 a gallon, and grain prices are up to feed the cows.

But the rising price is good news nonetheless.

“We needed something good like this to happen,” he said.

Jim Hilton of Norridgewock, who has more than 200 cows, expects that he might be able to buy a new piece of equipment if milk prices stay up. But he’s also cautious because he’s seen the low prices of past years that drove many dairy farmers out of business.

Young farmers who want to get into the milk business will need even higher prices, he said.

The rising prices are a result of basic supply and demand, said Doug DiMento, spokesman for Agri-Mark, a Northeast dairy cooperative.

“A lot of farms have gone out of business in the last year,” he said.

Should prices for dairy products keep rising in the months ahead, consumers could change their buying habits, Millay said. They’ll keep buying milk for the most part, but they might buy margarine instead of butter and cut down on cheese, he said.

“Stocks would go back up, and then the prices would fall,” Millay said. “It’s happened before.”