Without farm bill, milk prices could double
CHICAGO (NBC) -- The dairy industry is calling it the "milk cliff." Just like tax rates...if congress doesn't approve a farm bill by January 1st, the price of milk could go up. Way up.
Right now an average gallon costs $3.65. It could soar to between 6 and 8 dollars.
It wouldn't be just milk prices all dairy products would be affected - imagine if Wisconsin cheddar cost more than imported French brie. And what would that mean for the average grilled cheese?
One part of the large and very complicated farm bill controls the dairy market - without it, pricing would go back to an outdated law put in place during the Truman era.
The government would be required to buy dairy products based on 1949 production costs when milking was done by hand...that would double today's price. Farmers would lose incentive to sell directly to producers and prices in the grocery store would skyrocket.
It just can't happen....it can't happen
Farmers like Skip Hardie in New York say it would be nice to get high prices from the government at first...but ultimately this would kill the industry.
“The economy being what it is, if the price of anything doubles, people are going to stop buying it,” said Hardie.
Luckily for Congress, it won't happen right away. The Department of Agriculture could take weeks to put a new dairy purchase program in place.
They'll have time enough after the new congress is seated to pass legislation that either extends our previous farm bill or perhaps even pass a new farm bill.
But eventually Congress will have to agree on something, or a staple at the dinner table could soon turn into a luxury.