Casey warns of higher milk prices without new farm bill
The price of a gallon of milk could rise to $6 to $8 a gallon next year if Congress fails to pass a new farm bill before Jan. 1, U.S. Sen. Bob Casey warned Friday, though some cautioned any price hike could be smaller and not immediate.
Casey, a Democrat, urged the Republican-led House to approve a Senate farm bill that passed overwhelmingly in June with bipartisan support.
"If the House doesn't take action, we could revert to a 1940s-era law that could waste taxpayer dollars and cause milk prices to skyrocket," he said. "By refusing to take up the farm bill, the House is forcing the Department of Agriculture to implement a dairy policy which is decades old. It could cost the government, by one estimate, $12 billion to $15 billion."
A farm bill has been tied to the economic "fiscal cliff," with The Associated Press reporting agriculture industry leaders hope the farm legislation can be added to any final fiscal package.
Under the law, the secretary of agriculture would be required to set federal price support subsidies at levels equivalent to those used in a 1949 law that Congress has overridden repeatedly in the decades since. Those levels are several times higher than current levels.
Without a permanent solution, the potential exists for a "huge, huge impact (on) something as fundamental to people's lives as picking up a gallon of milk," Casey said.
Others agreed prices could rise, but said the warning is mainly a way of pushing final action and milk prices that much higher are unlikely.
Arden Tewksbury, manager of the Progressive Agricultural Association, who lives in Meshoppen, said the state Milk Marketing Board told him the worst-case scenario is a price hike in Northeast Pennsylvania from slightly more than $4 a gallon for whole milk to about $5.64 a gallon.
Tewksbury doubts prices would rise right away.
First of all, the United States Department of Agriculture would have to gear up and producers would have to prove their dairy products are part of a surplus, the only time the federal government directly steps in and buys products to keep prices down.
"Where is the USDA going to come up with money to buy the products?" he asked. "They're (members of Congress are) going to do something. Maybe they'll extend the dairy provision in the (current) farm bill for six months. I don't think they'll let it go up in price. ... It's not going to go to $6 or $8 a gallon."
Tim Moyer, secretary of the Milk Marketing Board, confirmed prices could rise "significantly," though not right away. He did not have a price estimate.
The federal government has already announced January milk prices so they won't be affected, meaning any price hike would not happen next month, he said.
Local dairy farmers and consumers did not seem overly concerned about the potential for much higher consumer milk prices.
Paul K. Manning, owner of Manning Farm Dairy, said he has not followed the issue too closely.
"I figure they'll probably make some sort of adjustment before the first of the year," he said. "If something like this does happen, the backlash would be so great that they would get something done in a hurry."
As she shopped at the Giant in Dickson City, Elaine Yanulavich said she does not think families should be forced to find alternatives.
"There are children that need milk," she said. "They need something nutritious." Mrs. Yanulavich said she only drinks milk occasionally and would stop buying it if the price goes up.
Angel Lubeck was unaware of the possible price change.
"I just started drinking milk because it's so healthy for you," she said.
She would cut back on drinking it if it gets too expensive.
"It's crazy to think of milk as a special treat," Lubeck said.