Continuous News

'Milk Cliff' could mean $8 a gallon milk

Posted: Dec 28, 2012 5:52 PM by Ben Trotter

How would you feel about paying eight dollars a gallon for milk? If congress doesn't extend the current farm bill or approve a new one by January 1st, we could end up paying that much.

The current farm bill, a document over 2000 pages long, is set to expire on New Year's Day, and with it, the current subsidies and regulations on, among other things, milk.

If congress allows the bill to expire, a law from 1949 could take effect, which, while dairy farmers would benefit from higher milk prices, would mean that a regular gallon of milk could skyrocket three to four dollars in price.

For Ron Gompertz, owner of Wild Joe's Coffee Shop in Bozeman, this means bad business. Says Ron, "Would a latte actually have to go to eight or nine dollars a 16 ounce latte if this goes into effect?...80% of that drink is milk, whether it be non-fat or whole milk or whatever, so it's a really major impact..."

One of the reasons the current farm bill is about to expire, is that the senate and house can't agree on which version to pass.

According to Vincent Smith, professor of economics at Montana State University, "The house pays a lot more to the southern crops, and the senate bill more to the corn belt and northern crops".