Forget The Fiscal Cliff – Dairy Cliff Doubles Price Of Milk!

dairy cliff

With so much attention being paid to the fiscal cliff we often lose sight of other things that Washington is failing to do.  One of those things is being dubbed the “Dairy Cliff”, and if not addressed may cause the price of milk to double, pushing the price to over $7 a gallon.

In particular, Congress has failed to agree on a new agriculture bill, even though the last one expired last summer. As CNN reports:

It works like this: In order to keep dairy farmers in businesses, the government agrees to buy milk and other products if the price gets too low. The current agriculture bill has a formula that means the government steps in if the price of milk were to drop by roughly half from its current national average of about $3.65 a gallon.

Further, if Congress cannot come to an agreement there is a fallback:

the law states that if a new bill isn’t passed or the current one extended, the formula for calculating the price the government pays for dairy products reverts back to a 1949 statute. Under that formula, the government would be forced to buy milk at twice today’s price — driving up the cost for everyone.

Bottom line, if you’re a milk lover, or like anything made with milk you could be in for a big shock very soon if Congress can’t get its act together. Even more worrisome is the health of our children and how this impacts the millions of families for whom doubling of the price of a gallon of milk will cause extreme economic hardship.

Tell us what you think, and whether doubling the price of milk will effect you.

Image By: liz west

About Anthony Candella

Anthony is the founder and Directing Attorney of and has been helping consumers just like you understand and improve your credit and financial situation since 2003.