Watch Out! Dairy Cliff Ahead: Milk Prices Could Double

Congressional inaction could mean milk prices spiking to as much as $8 a gallon in 2013

With Congress embroiled in talks to avoid a fiscal cliff, they're in danger of triggering a "dairy cliff," potentially driving up the price for a gallon of milk in 2013. At issue is the House's inaction on a five-year farm bill that basically sets a minimum on the amount dairy farmers will be paid. If Congress fails to act before the Jan. 1 deadline, the country's farm policy will revert back to rules put in place during the 1940s. This in turn could mean the price for a gallon of milk increases by as much as $3 a gallon, or having consumers paying $6 to $8 a gallon in some areas in 2013.The Senate has passed a farm bill, but it has lingered in the House. And milk isn’t the only thing that’s in limbo. The bill also includes disaster relief for farmers and foreign food aid that already expired Oct. 1. “It would be an administrative nightmare,” said James Dunn, professor of agricultural economics at Penn State. “The farmers would lose a lot of flexibility in what they produce. (Washington Post)

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