Why Milk Could Hit $8 a Gallon
Old law could be reinstated if Congress can't reach compromise
By Kevin Spak, Newser User
Posted Dec 21, 2012 11:14 AM CST
A man buys milk in this file photo.   (AP Photo/Dinesh Ramde, File)

(Newser) – If Congress doesn't get its act together soon, old laws will cost all of America dearly—we're speaking, of course, of the Milk Cliff. If legislators don't take a break from fiscal cliff negotiations/posturing and pass a new farm bill by Jan. 1, the government will be forced to abide by a 1949 law that would force it to buy milk at roughly double the current market price, the New York Times points out. The inflated price tag would spur dairy farmers to sell to the government instead of the commercial market. That would lead to shortages that would push milk prices as high as $6 to $8 a gallon, explains the Times, up from a current average of $3.65.

That new government price would be calculated in part using 1949's almost entirely by-hand milk production costs. Today, milk is much cheaper to produce, so farmers would reap a windfall profit. But it would also drive producers of products like butter, cheese, and yogurt, to find an alternative, like imported milk. "It would be short-term euphoria followed by a long hangover," says one dairy farmer. "I don't think customers … are going to pay double what they are paying now for dairy products."

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Showing 3 of 64 comments
Dec 26, 2012 8:56 AM CST
Someone could fill a library with examples of just how inept this government "of the people, by the people and for the people" has really become.
Dec 24, 2012 3:17 PM CST
i like mama milk! free! yum!!!!!!!!!!
Dec 23, 2012 10:48 PM CST
Looks like they are going to be milking us and not the cows.