Milk Prices Could Double if Farm Bill Isn't Renewed

By: Madeline Anderson Email
By: Madeline Anderson Email

Shoppers' grocery bills could be going up soon, that's if Congress doesn't extend the current farm bill or pass a new one by the end of the year. It's set to expire on Jan. 1, 2013, when the law will revert back to its 1949 wording. And that means the government would be forced to buy milk at inflated prices--bad news for consumers' wallets and farmers' products.

There's no time off in the farming business. "We produce approximately 1.5 million lbs. of milk/year," said Stratford dairy farmer Jon Arnes.

It's an around the clock job to feed, milk and clean up after his 70 cows. So as that clock now winds down to the new year, Arnes fears his business could be in trouble.

"If there's no demand, there's no use for our supply of milk," he said.

A dairy subsidy for farmers expires in less than a week. Without that program in place, the government would have to pay people like Arnes roughly twice the current rate to keep the milk market stable.

"I would like 30-some dollars per hundred[weight], but in reality, can people afford that? I can't," he said. "It will snowball effect down the line. And they will jump that price in stores dramatically."

At Trig's in Wausau, a gallon of milk costs around $3.69. But if the farm bill isn't passed, Arnes believes the price could go up to $6, even $8/gallon. And that may mean fewer people head down the dairy aisle in the future.

Not everyone is drinking up the hype, though. Marathon Co. dairy agent Heather Schlesser says the price farmers see is only half of the equation.

"The other half accounts for the hauling, the processing, the marketing and the retail aspect of it," she said. "Well that cost isn't going up any. So if the farmer's price goes up, still half of that cost stays the same. So you're only going to see a $1.50 to $2 price increase on the shelves."

But even a slight increase is hard to swallow for Arnes. He's already struggling to afford hay because of this summer's drought.

"You could produce milk for a short period of time and after the bottom fell out, and you basically have to buy anything anymore, you might as well send the cows down the road and have them made into hamburger and call it quits," Arnes said. "Because it's not going to be worthwhile as far as the dairy industry anymore"

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