'Dairy Cliff' Could Bring $7-a-Gallon Milk

2:08 PM, Dec 28, 2012   |    comments
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If negotiations over that so-called fiscal cliff aren't enough to worry about America's milk drinkers are also edging closer to what they're calling the dairy cliff.

And experts say that could drive milk prices up to $7 dollars a gallon or higher in 2013.

That's because the current federal farm bill expires on Dec. 31.

One of the things that bill covers is milk price supports.

For decades, the federal government has agreed to buy milk from dairy farmers if the market price gets too low.

That's to ensure a steady supply of milk by guaranteeing that farmers will turn a profit.

But when the current program expires next week, the price supports will revert back to a law passed in 1949.

Milk was actually more costly then compared to what people earned.

And that law set a minimum price for milk that would rise with inflation.

And if that kicked in next week, it means the government would have to pay dairy farmers $7 a gallon for their milk -- or more.

And that cost would get passed along to consumers.

Congress could prevent that by renewing the current farm bill as part of the fiscal cliff deal.

Or they could vote on it separately.

But either way, if they don't act on the dairy cliff in the next four days, next year could see a lot of people crying over spilt milk.

With milk prices so high, families may find themselves trying to cut out milk instead of coping with the new prices, and farmers don't want that happening, even if their profits could be higher.

In October, 13WMAZ's Tom George went to Eatonton to talk to farmers there about the farm bill and the lack of compromise. 

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