A gallon of low-fat milk will cost $3.10, up $1 from the price in January — and expect the spike to make other products more expensive, too.

California has set a record price for the magic white serum that enhances bone strength, promotes muscle recovery, prevents cavities and takes the edge off insomnia and premenstrual syndrome — and all the other virtues claimed in those clever “Got Milk?” ads.

Effective Sunday, the California Department of Food and Agriculture has set the price California dairy operators will be paid at a record $1.98 per gallon of milk, up from $1.06 a year ago. The minimum retail price for a gallon of low-fat milk, said the department, will be $3.10, compared to $2.10 in January.

The state posts the “lowest reported lawful retail price” for milk due to a law that says milk cannot be sold below cost.

The price spike — the result of a drought in Australia, tightening supplies from Europe, higher demand in Asia and the diversion of feed corn to ethanol plants — also threatens to jack up the cost of cheese, lattes, chocolate bars and pizzas.

A constellation of economic forces have pushed the price of milk up for seven consecutive months and is expected to set the all-time record in July.

“There’s rapidly growing demand and tight supply,” said Dave Heylen, a spokesman for the California Grocers Association. “Typically, retailers will try to hold the line, but price increases are occurring upstream … and it’s difficult for the retailer not to react to that.”

The demand for milk protein is surging, particularly in China, India, Indonesia and other nations with developing economies, said Bill Van Dam, chief executive of the Alliance of Western Milk Producers, a trade association of producers in Sacramento. Supplies are tightening because of a yearlong drought in Australia, typically a major dairy exporter. In addition, there is a cap on dairy subsidies in the European Union, dramatically reducing what is typically a bountiful supply, he added.

Meantime, the price of corn, which dairy operators use to supplement forage for their cattle feed, has more than doubled amid a construction boom in ethanol plants.

“Biofuels are going to rip the ears off the food industry” as corn goes not for food but for fuel, said Jim Boyce, the president of Marin French Cheese Co. in Petaluma. He said Friday that his dairy bill increased 58.5 percent from May 2006 to May of this year — from $1.15 per gallon of milk to $1.83 per gallon.

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