Milk, grocery prices on the rise if Congress ignores farm bill

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Santa suit-clad warriors who've stormed the Hill protesting for a Christmas free of concern that their tax rates will soar Jan. 1 may have more at stake than they realize: Even if lawmakers manage to patch together a makeshift bridge across the so-called "fiscal cliff" by year's end, it's looking increasingly doubtful that a farm bill will be included as one of its planks. And with milk prices set to spike to $6 to $8 a gallon come January, Saint Nick may see the average family's budget cuts affecting his favorite milk-and-cookie spread.

The "dairy cliff" is just the most immediate of what would be gradual price increases on foods across grocery stores if Congress doesn't pass a farm bill to replace the one that expired nearly three months ago. Technically, farm regulations since the end of September have been operating under a 1949 "permanent" law. Because the 2008 law covered all crops planted in 2012, though, and federal funding for many agricultural programs is assured through March 2013, lawmakers have enjoyed a bit of a grace period until Jan. 1, when products like milk could skyrocket to prices based on dairy farm production costs 64 years ago.

But just days before the end of the year, farmers and their bankers - left in the lurch with decisions about next year's crops - are still waiting and hoping for a holiday miracle in Washington. Agriculture Secretary Tom Vilsack might advise they don't hold their breath: After weeks of aggressively campaigning to get the House and Senate Agriculture Committees in a room to hash out the makings of a new five-year plan, Vilsack this week conceded that the passage of a bill by Jan. 1 was unlikely.

• As farm law expires, its future uncertain
• One way to pass farm bill: Attach it to fiscal cliff
• Lawmakers still see path to avert "fiscal cliff"

"The reality is that there is a very serious risk that we might not get a farm bill done this year," he said Wednesday at a U.S. Chamber of Commerce event, according to USA Today. "The uncertainty of not knowing what the policies are going to be will create difficulties. We need a farm bill and we need it now."

Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., and her House counterpart, Rep. Frank Lucas, R-Okla., have both blamed their parties' leadership for keeping them out of the loop on the best- and worst-case scenarios for a farm bill. Lucas told Politico last month that House Speaker John Boehner, R-Ohio, had indicated to him, however vaguely, that farm legislation -- the urgency for which has largely been ignored by Congress, and the media -- was being strongly considered as part of the deficit reductions necessary to avert the far more publicized "fiscal cliff."

In a statement to CBSNews.com, Stabenow said she's holding out hope that the spending cuts offered in potential farm legislation are appealing to leaders trying to negotiate past the "fiscal cliff." "The farm bill is the only bipartisan deficit reduction bill that passed the Senate this year, and including it in a larger deficit reduction agreement would help the country avoid the fiscal cliff," she said. "Without a 5-year farm bill by the end of the year, milk prices could begin to rise sharply and America's agriculture economy will continue to be significantly impacted."

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[doctordan38]

I love milk! I drank 2 gallons a week myself. Notice I said "Drank". It just jumped to $4.29 here in Erie ,PA. I said I would quit if it went to $4. I am retired (worked hard all my life...still do) and cannot afford it on my budget. I'm not poor enough to collect food stamps or qualify for WIC and I'm not rich enough to afford my milk habit. My taxpayer money is paying for those people to enjoy that luxery. Got Milk ?!

[HistoryNote]

The old adage - "the price of eggs", is about to hit home, a dozen fold. Think about how many products the price of milk affects. Here's a short list:

Cheeseburgers. - Say goodbye to the dollar menu at the drive thru.
Salads - That'll be an extra dollar for that ranch dressing.
Pizza. - Look for the new "Reduced-Cheese" pizza. (that might actually taste better)
Pastry - Imagine the Three Dollar Doughnut.
Coffee with cream. - Add a dollar for the cream, and expect the complimentary cream pods to vanish.
Cookies - Plan on paying two bucks a cookie.
Instant Potatoes - Look for box size to shrink.
Canned Soup - Some are made with milk, so expect them all to go up in price.
Cosmetics - Look for the new "Lactose Free" replacement.
Chocolate - Indulgence at a new price level.

What's for shame is that the milk cow will receive nuthing from the price increase. Poor Cows. What's unknown is the trickle-down effect on the economy from the price of milk - basically doubling.

[nearl451]

.....and the "straw man" argument is complete.

If the cost is $8 without govt subsidy and $4 with the subsidy, how much does the subsidy cost the average tax payer per gallon or increase the budget deficit?

This is where hedge funds and CDS's were invented:as "insurance" against bad (read shortage)years.

[knsn_for_cmn_sense]

poor poor corporate dairys wont get their subsidies.... COF- corporate welfare.

[knsn_for_cmn_sense]

Farm bill is one of the biggest welfare bills out there. And I am not talking about food stamps. So much "please dont work" cash in that bill.

I say let that bill BURN and let the free market take over.

[hopeing2win2]

the price of milk goes up in price again i will not buy it until it drops in price. you should to, when you by it you just telling them you pay what ever they want for it. we need to say NO and stand up to it. all is a whole lot of BULL SHI-

[logictoo]

Goat milk is already $16.00 per gallon.

[micmac666]

"I think I'll go out and milk the elk." - W.C.Fields in "The Fatal Glass of Beer".

[beachshoe]

Another can kicked down the road by the US Congress.

[credibility2]

Taxpayers shouldn't be subsidizing farmers that are owned by mega corporations.

[sabniz]

yep, we need to end all subsidies!

[nearl451]

Yes. If a farm bill is required to reduce the consumers price of milk, then we are in effect payingthat price now! Just through taxes AND purchase price.

[empirebuilder]

Somehow, some way, Obama will make this out to be Bush's fault.

[WHAT-IS-HE-SMOKING]

No, just the republican congress for not doing their job. After all it is still stuck in the House.

[catmomtx]

Like you are doing? No one is even talking about George Bush but Republicans who have nothing else to say.

[TJphoto]

Does anyone here think Congress cares about the average American Citizen? Congress capped the interest rates for credit cards at 32%. Does anyone here think a member of Congress will step up to the cameras and defend that? 98% get re-elected with money that is not from the electorate. Figure it out on your own!