Could Milk Prices Could Reach Eight Dollars a Gallon?

Could Milk Prices Could Reach Eight Dollars a Gallon?
Friday, December 7, 2012 - 10:24pm

Eight bucks for a gallon of milk? It's possible. With sky-high feed prices for bovine, thanks to a record drought, third generation dairy farmer Dan Wiebe of Whitewater, Kansas is wondering, what happens next. "Grain prices are our protein sources, soybean meal, all that stuff is outrageous," said Wiebe. Dan says he's actually in expansion mode. He's got a good game plan on his family farm, but he knows there is no farm bill so the price of milk could vary over the next six months. Why? The government sets a minimum price for milk prices so dairy farmers can stay in business, but with no farm bill they could get hit by huge fluctuations in prices.

Agriculture experts watching politicians on Capital Hill agree that could be a game changer for pricing. "Which would put many dairies out of business and with the lack of supply, and demand remaining the same, it could force milk prices to go as high as eight dollars a gallon," said one of those experts, named John Jenkinson. Experts say with all the focus on that fiscal cliff a new farm bill has seemingly slipped through the cracks, so the price of milk could dip causing farmers to sell.

On the Wiebe farm Dan knows others have already been selling. "I know of another guy that's going to sell out any day now and if he doesn't get them sold, he's going to take them to the sale barn," said Wiebe. While supply will dip with some calling it quits, demand for a glass of milk will probably stay the same, and over time lower supply means prices could spike. While Dan Wiebe keeps doing what he loves riding out the price changes, experts say the price we pay at the store could rocket because right now it does not look like we will have a new farm bill any time soon. "Once we roll the calendar into the new year, it's going to leave dairy farmers very vulnerable and they could lose thousands and thousands of dollars per day," said Wiebe.

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