by Nate Wooley | December 6, 2012 1:31 pm
Without congressional action, the price of milk could more than double in January.
Congress — trapped as it is by gridlock and the ongoing fiscal cliff negotiations — hasn’t reauthorized the farm bill, reports NPR. Without reauthorization, which is supposed to happen every four years, dairy price supports will disappear, and the price of milk will go up. Experts warn that prices of $6 to $8 per gallon could be seen almost immediately should the current farm bill expire.
Last year’s drought has increased the cost of maintaining a herd of dairy cows. That might not be a problem for some farmers because a great deal of agriculture is covered by crop insurance and other federal programs. But dairy is an exception. With the price to produce milk now far exceeding what it will bring, without the price supports, farmers will have little choice but to increase the cost of milk to stay in business.
If the law isn’t reenacted, a 1949 law will take effect that will more than double the cost of a gallon of milk. That law is framed in such a way as to provide incentive for Congress to reauthorize the farm bill, but so far, that hasn’t happened.
Source URL: http://investorplace.com/2012/12/price-of-this-kitchen-staple-could-double-in-january/
Short URL: http://invstplc.com/1ftUu05
Copyright ©2017 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.