Holy cow - $8 for a gallon of milk?
Without a deal on a farm bill, prices could double beginning next year.
It’s being called the “milk cliff.”
That’s because if Congress fails to pass a farm bill to renew federal support for agriculture programs, the country’s milk prices could increase to as much as $6 to $8 a gallon beginning Jan. 1.
Industry experts are skeptical of that happening. But without legislative action in the next three days, the government would be forced to revert to a 63-year-old dairy price subsidy requiring the U.S. Department of Agriculture to purchase milk and milk products at inflated prices.
That, in turn, would raise the price for everyone. Shoppers are none too pleased about the prospect of paying about twice as much or more for their milk.
“I think what we need in this country is less politicians and more cows,” said Susan Riemer, 64, of San Diego.
Riemer and her husband consume a quart of milk each week. Her 95-year-old mother, Sonny Rozolsky, purchases the same amount. Shopping at Vons in the College Area on Friday, they said seniors could ill-afford the additional financial burdens at the checkout stand.
“These are all just games controlled by politicians in Washington,” Riemer said. “I would like our country to come back to its senses.”
Much like what’s become known as the “fiscal cliff” — the combination of automatic spending cuts and expiring tax breaks — some experts believe the 1949 law was kept on the books to spur congressional action on a farm bill by scaring lawmakers with the threat of higher subsidies for milk and other goods.
Michael Marsh, the chief executive of Western United Dairymen, stressed the Agriculture Department has not yet crafted regulations that would allow for increased milk prices come Jan. 1.
“They haven’t even started drafting them and my guess is they wouldn’t even start until they got direction to do so from Congress,” said Marsh, whose group represents more than 60 percent of the milk produced in California.
“As a practical matter for consumers, your milk price at the grocery store on Jan. 1 is not going to be dissimilar from what you pay on Dec. 31,” he said.
Marsh suspects one of two scenarios to play out over the next two to three days. Congress could either pass an extension of existing legislation that expired on Sept. 30. Or, if lawmakers are able to reach a deal on the fiscal cliff, they could roll a version of the farm bill that passed in the Senate into the broader package to be signed by President Barack Obama.
California is the No. 1 milk producing state in the country. About one out of every five glasses comes from the Golden State, according to the Western United Dairymen.
Lee Hodge is the general manager of Hollandia Dairy in San Marcos. Founded by Dutch immigrant Arie deJong Sr., the dairy has operated at its site for more than 60 years and today sells its goods to schools, military bases and retail outlets throughout Southern California.
Hodge said he’s been in touch with agriculture officials in Sacramento who told him to expect that “cooler heads will prevail.”