Dairy Farmers Warn Milk Prices Could Skyrocket To $6 A Gallon

How much would you pay for a gallon for milk? Dairy farmers warn that there could be a jump in price at the grocery store by year’s end.

Ken Nobis is with the Michigan Milk Producers Association and notes that Congress has its plate full of very pressing issues and fears the Farm Bill may be on the back burner:

“Probably, talking in the neighborhood of $5-6 a gallon for milk,” said Nobis. “The consequences are consumers aren’t going to buy the product at that cost.”

The U.S. House voted down a farm bill back in June — after the Senate approved a different version. There have been disagreements over food stamp funding tied to the measure. Read more >>

With Farm Bill Stalled, Consumers May Face Soaring Milk Prices

Forget the fiscal crisis and the automatic budget cuts. Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating back to the Truman presidency.

Lost in the political standoff between the Obama administration and Congressional Republicans over the budget is a virtually forgotten impasse over a farm bill that covers billions of dollars in agriculture programs. Without last-minute Congressional action, the government would have to follow an antiquated 1949 farm law that would force Washington to buy milk at wildly inflated prices, creating higher prices in the dairy case. Milk now costs an average of $3.65 a gallon.

Higher prices would be based on what dairy farm production costs were in 1949, when milk production was almost all done by hand. Because of adjustments for inflation and other technical formulas, the government would be forced by law to buy milk at roughly twice the current market prices to maintain a stable milk market. Read more >>

Food Prices Jump to Six-Month High as Dairy Costs Rise

World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said.

An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years.

Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone.

“Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.” Read more >>