‘Milk Cliff’ Could Make Prices $8 Per Gallon


If Congress fails to pass the Farm Bill before January 1st, milk prices could rise to $8 a gallon.

America could go over the “milk cliff” because of an arcane 1949 provision that could more than double the price of milk:

At the heart of the trouble is an old provision designed to create a floor for how much dairy farmers are paid for milk — a kind of minimum wage. The formula for calculating that price, however, is based on assumptions that are a century old, predating the improvements in dairy farming. That old formula, if not replaced by a new farm bill, would push prices higher.

The dusty law was implemented “as a poison pill to get Congress to pass a farm bill by scaring lawmakers with the prospect of higher support prices for milk and other agriculture products,” says Montana University Professor Vincent Smith.



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