Price of milk could climb to $8 a gallon

brower47

From: http://www.cnbc.com/id/101246790

Brace yourself: The U.S. is about to go over the "dairy cliff," which could cause milk prices to jump.

If Congress is not able to pass a new farm bill before the 2008 farm bill expires at the end of the year, a decades-old law will then kick in. As part of this permanent legislation from 1949, the government would then buy dairy products from producers at about twice the current market rate.

"It could take a period of weeks or a month or two for there to be a trickle-down effect at the retail level," said Chris Galen, senior vice president of communications at the National Milk Producers Federation, a group of 30 dairy cooperatives. "What happens under this permanent law, the USDA is required to basically support a much higher price to dairy farmers."

Possible impact of an expiration

Once this price increase gets passed down to shoppers, Galen said milk prices could jump as much as "$2 or $3 a gallon" possibly even as high as $7 to $8 a gallon in pricier markets. The national average for a gallon of milk in October stood at about $3.46, according to data from the Bureau of Labor Statistics.

If the farm bill expires, "domestic demand for dairy products would fall by an estimated 9 percent, and exports, which have seen much growth over the past decade, would likely disappear as the cost of U.S. dairy products would become prohibitively expensive," the Executive Office of the President predicted in a recent report.

In order to support these higher prices, the government would have to buy and store large quantities of dairy, which would cost the federal government "at least $12 billion per year," the report forecast.

So what's causing this dairy impasse?

"This is the second time we've been down this road. The same thing happened last year," Galen said. "It's because of gridlock on Capitol Hill. It's very similar to the showdown and shutdown we had in October."

I guess my personal milk consumption will plummet. This should make the anti milk crowd ecstatic.

U.S. politicians... :noway:

dbmata

I already pay $7 a gallon.

Granted, it IS some excellent raw milk.

janessafantasma

I lived on Guam and a half gallon of milk was $6.50, it was sad. I would go through diary withdrawal. Milk and cheese are my manna from Heaven.

LiftAllThePizzas

GIRDLOCK!

kamakazeekim

And the farmer wont see a cent of it My parents have a small dairy farm and they struggle just to make it another day.

dbmata

And the farmer wont see a cent of it My parents have a small dairy farm and they struggle just to make it another day.

They should look at what the farmers in WA are doing. Sell direct, raw... make a mint.

kamakazeekim

We live in MN and it's against the law to sell raw milk here...although my parents do barter with a few people...one guys does automotive work in exchange for milk.

janessafantasma

We live in MN and it's against the law to sell raw milk here...although my parents do barter with a few people...one guys does automotive work in exchange for milk.

I was just going to mention something about the Midwest and you verified what I thought, you are also from the Midwest... I grew up in Minnesota in farm country and it is so irritating to see the losses that a lot of farmers have had to deal with and not getting any real assistance from the government.

dbmata

It's unreal that it's illegal. It's even legal in MA, and they make everything illegal there.

janessafantasma

It's unreal that it's illegal. It's even legal in MA, and they make everything illegal there.

You can get it direct from the farmer, but basically MN doesn't see any significant health benefits associated with raw milk over pasteurized milk and believe the risks are too great due to the potential for bacteria.