> consider why skim milk costs LESS than whole milk, even though skim milk is more expensive to produce. ... Isn't skim milk a side-product of making cream and

> consider why skim milk costs LESS than whole milk, even though skim milk is more expensive to produce. ... Isn't skim milk a side-product of making cream and butter, which is the "fat" part you mention? I understand your point, and the consumer side is definitely a factor in how jointly-made products are priced, but it isn't exactly irrational for it to cost less, even though it's made using whole milk as a feedstock.