The Economics of Milk

So here's a question for those whose knowledge of economics, unlike mine, did not end with AP Economics in high school. I was at the grocery store today and noticed that milk was on sale ($2.49 a gallon, down from $2.99). This struck me as rather strange, and got me thinking.

So my first question is, am I right in assuming that the profit margin on milk is probably small? My amateur logic assumes that the competitive market price could be pretty low because there are so many sources of milk, while still bringing in profits because it is such a high volume product.

On the off chance this thinking is correct, then taking almost 17% off the price would probably lead to a loss on the sale of that item. If so, why would they do this? One reason grocery stores put items on sale is to get people to give the product a try, hoping that they will continue to buy even after the sale is lifted. This seems an unlikely strategy to apply to milk, which would seem to already have a pretty stable demand. So the only thing I could think of is that they were selling milk as a loss leader. Does that sound right?

I know it's not a particularly interesting or complicated economic question, just one that I'd really like the answer to.

(By the way, all pints of Ben & Jerry's were $1 off... I bought 4 of the Half Baked frozen yogurt).