Milk prices may soar if no deal on farm bill


At the Ralphs grocery store in Canyon Crest, Riverside, milk was going for $2.99 a gallon on Monday. But that price could potentially double by January if no deal is reached.

Congress is in a big fight over the farm bill, specifically, the parts of it dealing with the $80-billion-a-year food stamp program.

The farm bill, which sets policy for farm subsidies, the food stamps and other rural development projects, has moved slowly through Congress in the last two years.

The House has passed legislation to cut around $4 billion annually, or around 5 percent, including changes in eligibility and work requirements. The Senate has proposed a cut of around a tenth of that amount, and Senate Democrats and President Barack Obama have strongly opposed any major changes to the program.

Members of the House and Senate are scheduled to begin long-awaited negotiations on the five-year, roughly $500 billion farm bill this week.

If they can't come to a compromise over how much to cut food stamps, starting Jan. 1, a provision from a law in the 1940s would kick in, putting a formula in place that would have the government start buying dairy products at sky-high prices. That would in turn drive milk prices up everywhere.

"I'd hate to see that happen. It's bad enough, the economy what it is today and people that are barely making it," said one shopper.

But not everyone thinks higher milk prices are a bad thing, especially if you're a dairy farmer in a struggling industry.

"On a weekly basis, we have California dairy farmers selling their entire herds and getting out of the business," said Rob Vandenheuvel of the Milk Producers Council.

Vandenheuvel says the whole reason this old law from the 1940s exists in the first place is to give milk producers a safety net by allowing the government to set higher prices.

"If we don't have a farm bill, I hope to see higher prices at the grocery store until Congress acts. There needs to be some message to Congress that they need to act," said Vandenheuvel.

The Associated Press contributed to this report.

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