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“Dairy cliff” bringing $7 gallon of milk may be avoided

milk gallonWASHINGTON, D.C. – A bill in the House of Representatives may be voted on within the next day or so to help avoid what is being called a “dairy cliff” that could bring with it milk prices of up to $7 per gallon or more.

Secretary of Agriculture Tom Vilsack has said that because no farm bill has been passed by Congress, the resulting higher prices for milk would be passed on to consumers.  It was reported Monday that House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill but a vote may not be allowed.

“Consumers, when they go in the grocery store, are going to be a bit shocked when instead of seeing $3.60 a gallon for milk, they see $7 a gallon for milk,” Vilsack said in an interview with CNN (see video below.)

NBC has reported that without a new bill “or an extension of current law, milk prices would revert to rules set in 1949, the last ‘permanent’ farm legislation in the United States. Government price supports would kick in, based on production costs 64 years ago, plus inflation. The potential retail milk price has been estimated at $6.00 to $8.00 a gallon versus current levels near $3.50.”

The bill in the House that is awaiting a vote would be a one year extension of the current law.

If the bill is not passed, NBC reported that “the price of milk will not double on Jan. 1, if Congress fails to act. Instead, prices would rise gradually as supplies are removed from normal markets and land instead in U.S. Department of Agriculture storage facilities.”

VIDEO: Agriculture Secy. Tom Vilsack: milk could hit $7/gallon

httpv://youtu.be/vjfS8nME3-Q

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