Milk prices may hit $7 a gallon in 2013
December 22nd, 2012
03:00 AM ET
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The New Year could push milk prices to $7 a gallon.

With Congress spending all its time trying to avert the fiscal cliff, a slew of other legislative matters are going unattended. One of them is the agriculture bill which, if not addressed, could lead to a doubling of the price of milk early next year.

It works like this: In order to keep dairy farmers in businesses, the government agrees to buy milk and other products if the price gets too low. The current agriculture bill has a formula that means the government steps in if the price of milk were to drop by roughly half from its current national average of about $3.65 a gallon.

Problem is, the current bill expired last summer, and Congress had been unable to agree on a new one. Several protections for farmers have already expired, and several more are set to do so over the next few months. One of them is the dairy subsidy, which expires January 1.

But instead of leaving farmers entirely out in the cold, the law states that if a new bill isn't passed or the current one extended, the formula for calculating the price the government pays for dairy products reverts back to a 1949 statute. Under that formula, the government would be forced to buy milk at twice today's price - driving up the cost for everyone.

Previously - Beef prices moo-ve on up

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Filed under: Big Business • Budget • Business and Farming News • Farms • News

soundoff (20 Responses)
  1. kevwsmchu


    September 16, 2013 at 5:59 pm |
  2. dom

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    February 11, 2013 at 10:57 am |
  3. victoria

    Try Almond milk! Unless you're allergic to it. I don't have any other options for you.

    January 8, 2013 at 7:01 pm |
  4. Air Max 90 White White

    hello,my friend,how are you
    Air Max 90 White White

    January 8, 2013 at 4:27 pm |
  5. Liat Segal

    Good, the dairy industry is archaic and inhumane anyway. It's about time we started switching to the many available alternatives.

    December 31, 2012 at 9:31 am |
  6. Liat Segal

    Good. The dairy industry is inhumane and archaic anyway. It's about time we used the many alternatives that are out there.

    December 31, 2012 at 9:30 am |
  7. marymcc

    From what I've read other places it would be bad even for the dairy farmers. At milk at that high of a price people will look for alternatives like almond or soy.

    December 29, 2012 at 3:07 pm |
  8. marymcc

    I have been trying to figure out for a few days now why this story is not getting more news time. $7 a gallon milk would be annoying to me and many others but detremental to many as well.

    December 29, 2012 at 3:05 pm |
  9. Name*stephanie alves

    The state will have to pay people on wic or state benifits that price for milk thank god my family is lactose intolerance

    December 27, 2012 at 10:00 pm |
  10. Jay

    There shouldn't be a farm bill ... there should be no government involvement ... our food supply should be the product of a healthy and robust free market ... the farm bill is simply corruption, politicians doling out taxpayer money to buy votes .... I understand the federal government needs to purchase food stocks, they should do it on the commodity markets or directly with producers .. instead of distorting the markets ..

    December 27, 2012 at 9:08 pm |
    • Jay

      We should also STOP burning our corn stocks for ethanol, that is simply insanity ... another example of corruption ...

      December 27, 2012 at 9:09 pm |
  11. Dairy N Missouri

    I would like to say, my family and I, are farmers... dairy farmers.... okay i will explain on a better level because it is confusing. If the dairy market price that we get paid drops too low ( just like taking a pay cut on a monthly basis) and the input cost to keep up the dairy,( feeding livestock(grain prices..corn) stays the same or rises we start losing money by operating a dairy... no dairy ... no milk..= supply and demand = higher prices. Problem is this.. we are not making the money that most people think. we average .03 of the profit of a 4.50 gal of milk. the rest is bottling plants and corp. companies. it is like this.. example.... you sell apples..... they buy your apples at a set price per apple say $1.00. and later the market drops and they only can pay you $0.50 but the cost of water goes up and price of hauling goes up because of corn prices go up.. then it takes your profit from $1.00 down to $0.50 after you pay for hauling and water you are now growing apples with no profit and it costing you to stay growing apples... so on and so forth... its so scary most farmers are 2-4 generations farmers and dont know life of any sort. just a light into the dark tunnel of goverment controlled world

    December 27, 2012 at 6:57 pm |
  12. Gimme_My_Milk_NOW!! (But at a reasonable Price)

    Typical Libreal government inflating the PRICES and forcing US to SPEND more so they can take our guns and destroy our FREEDOM!!

    First MILK,Then It'll be BREAD,then it'll be GUNS!!

    You need MILK to make pie.And pie is AMERICAN.So by forcing us to spend more on MILK,your DESTROYING AMERICA!

    December 23, 2012 at 8:28 pm |
    • SMF

      You don't necessarily need milk to make pie, or for that matter bread either, though both typically work better with milk. However, I do agree that this makes absolutely no sense, the idea that the price going too low can force us to pay double.

      December 24, 2012 at 8:05 am |
    • Milk Me

      I'm praying to whatever God is out there that you're being sarcastic.......if not, you're just a back woods f-tard that should put your foil hat back on and go back into your mommy's basement and wait for the, in YOUR words, "Typical Libreal government" to take your dumb ass out with your guns. WTF is Libreal?? Spell check please.

      December 26, 2012 at 10:30 am |
    • E C


      February 3, 2013 at 1:34 pm |
  13. GA

    Another example of govt meddling in the market and causing issues...

    December 23, 2012 at 7:35 am |
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