Congress May Push Milk Prices to $8 a Gallon

By failing to pass a farm bill that subsidizes agricultural activity and funds the food stamp program, Congress could effectively double the cost of milk.

You really might cry over spilt milk next year, if Congress doesn’t pass a farm bill. Without it, milk could cost twice as much as gasoline in January.

Sound familiar? That’s because the same scenario was playing out last year. Lawmakers couldn’t agree on an important bill that sets funding for farms and food stamps. News outlets such as The Huffington Post were calling it the “dairy cliff,” a spin on the fiscal cliff, yet another financial disaster brought to you by Congress.

Once again, the fight is over food stamps. Last year, Republicans managed to get about $100 million cut from the program in a deal that avoided a milk price hike, The Huffington Post says. (The program costs about $80 billion, CBS DC says.) But they’re looking for a much bigger cut this year.

“The House has passed legislation to cut around $4 billion annually, or around 5 percent, including changes in eligibility and work requirements,” CBS says. “The cost of [food stamps] has more than doubled over the last five years as the economy struggled, and Republicans say it should be more focused on the neediest people.” Meanwhile, the Senate has proposed cutting only a 10th of that, or about $400 million, CBS says.

Unless Congress gets its act together, CBS says, “1930s and 1940s-era farm law would kick in, as much as quadrupling the price that the government pays to purchase dairy products.” In that scenario, farms would make more money by selling to the government than to the commercial market, meaning that the milk that did make its way to grocery stores would be far more expensive.

“Without a deal, consumers in January could pay $8 for a gallon of milk,” ABC News says.

Stacy Johnson

It's not the usual blah, blah, blah

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  • Kelly Vanaman Schrack

    Why don’t they just let normal market principles work? If milk is $8 a gallon, then less will be sold and they can either keep their supply or drop the price. If the government would stop manipulating and trying to control EVERYTHING, then our lives would be a lot simpler.

  • ed

    us/world combo companys manipulate wold meat,grain,chemicals, & all eatable /non eatable comedies world wide. screw around market for greatest return in bottim line. US GOV can’t inport tax, price support , subsidise unless tax money from somewhere else.

  • atewks

    Scare tactics on $8 per gallon milk continue. I
    have written 3 editorials explaining the fallacy of $8 per gallon milk being
    charged to consumers. These scare tactics are only an attempt to pressure
    Congress into passing a Farm Bill. If the 1949 Act did kick in, the price of
    milk could go up to approximately $5.32
    per gallon. Of course, this did not happen on January 1, 2013, and it will not
    happen on January 1, 2014. I know what I am talking about because I am the
    manager of the Progressive Agriculture Organization and the Chairman of the
    NFFC Dairy Subcommittee. We have proposed a fair pricing formula that would
    reflect a price to consumers that would be approximately $4.15 per gallon. However,
    Congress fails to respond to our formula because they favor promoting the
    interests of the Dairy Industry processors who want to continue to get farmers
    milk well below cost of production. The USDA does not subsidize dairy farmers
    on their milk. The present price dairy farmers receive is approximately $1.70
    per gallon, which is clearly well below what it costs farmers to produce
    milk. If the retail price of milk did
    reach $4.15 per gallon under our proposal, the dairy farmers would be able to
    receive about $2.24 per gallon. The dairy Industry processors want to
    pay the farmer as little as possible for farm milk. The current dairy proposals in the Senate and
    House versions of the Farm Bill contain a “margin insurance” provision that
    will be paid for by taxpayers to cover some of the dairy farmers’ losses. This
    is the wrong way to go. The pricing formula we have developed and promoted
    would not cost the taxpayers any funds, but it would require dairy processors
    to pay farmers a fair price for the farm milk

  • Kent

    This nonsense pops up a couple of times a year. Milk is too perishable to go up in price that fast. It might go up gradually, but it would take years to go up appreciably because production would have to go down first. And if production goes down, the price will go up, which in turn will make production go back up to it’s natural market level.

  • ron

    Maybe if they would cut taxes.I have read articles that there are 151 taxes on a loaf of bread(could not find one for milk)

  • Our leaders in Washington blow chunks!

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