Update: Tentative Deal Reached for Stopping Spike in Milk Prices

By: Kristin Bauer Email
By: Kristin Bauer Email

The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that would head off a possible doubling of milk prices next month.

Senate Agriculture Committee Chairman Debbie Stabenow indicated that the House could vote on it as early as Sunday evening. The agreement to extend current farm law until next October was reached as negotiators hit a snag on averting a broader fiscal cliff combination of higher taxes and spending cuts Jan. 1.

Agriculture Secretary Tom Vilsack said Americans faced the prospect of paying $7 for a gallon if the current dairy program lapsed and the government returned to a 1948 formula for calculating milk price supports.

Dawn Isaacs is a mother of three. She takes weekly trips to the grocery store, and milk always makes it onto her list.

"I have a five year old, a three year old and a one year old," said Isaacs, "so milk is on our list every week. We drink four gallons a week."

Isaacs said milk is an essential part of her children's' diets, which could make the so-called "milk cliff" hit her hard.

"It's pushed highly by our pediatrician so I don't know what other alternative there is. I guess we just have to pay for it."

Reports say if a new farm bill isn't passed by December 31, milk prices could double-- or even triple. This could leave customers paying $8.00 a gallon for milk.

Without legislative action in the next few days, the government will have to revert to a 1949 dairy price subsidy. This subsidy requires the Agriculture Department to buy milk at inflated prices.

"I'm not paying more for a gallon of milk than I would for a gallon of gas," said Maghie Jenkins. "[I buy] about two gallons a week, so quite a bit. Sixteen dollars a week is a little steep."

With the concern of the price spike, some people are wondering about alternatives.

"Soy milk hopefully wouldn't go up, but if it's due to a drought that would go up too," said Jenkins.

"I don't know what it could be," said Jerry Pierce, while shopping with his wife. "Milk is milk. Maybe buy a goat!"

He and his wife only use milk for cooking and cereal so they said, they would still buy it at a higher price.

However, Ruth Comer from Hy-vee, Inc. said they aren't worried, and you shouldn't be either.

"At this point, we don't see any immediate impact in January," said Comer. "That should give Congress and the administration time to get some provisions in place and to keep milk affordable and available for consumers."

It's a reality, no one wants to encounter.


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