Milk prices expected to double
POSTED: Thursday, December 27, 2012 - 6:40pm
UPDATED: Thursday, December 27, 2012 - 7:24pm
El Paso, TX — Milk does the body good, but come the new year it could milk your wallet.
After Dec. 31, Washington's inaction could push the country's milk prices to as much as $6 to $8 per gallon unless Congress passes a Farm Bill renewing federal support for agriculture programs. While nothing's set in stone, early predictions for milk prices are sour. One local store JR Produce has already seen those prices increase.
"It's expensive, but I would still buy it for my kids," said shopper Becky Reyes.
Right now, an average gallon of milk costs $3.60. At JR. Produce milk costs $3.19, still cheaper than average but pretty soon it could be up to $8 a pop. JR Produce supervisor Jose Gonzalez is affected in more ways than one. He not only sells milk, but he also drinks it too.
"Well I don't know what my son's gonna drink. That's what I think. me and my son are,we drink a lot of milk on a daily basis. We might have to pay it. It's gonna be a big dent in my pocket," said Gonzalez.
His wallet might hurt but so could the sales in his store.
"I think the people that are big consumers in milk, they're not gonna buy as much. They'll probably do other stuff, consume other stuff, to not pay that much so it will affect the farmers, said shopper Perla Diaz.
But some financial analysts think families will continue to buy.
"When you're only paying a certain percentage of your income in food and that percentage starts rising, then you have less money to spend on toys, games, prizes, clothing, furniture, in other words discretionary items," said Financial Analyst Juli Nieman.
And all of those fears have a foundation on Capitol Hill, where tied up in talks about the fiscal cliff is also the Farm Bill, which includes the Dairy Security Act.
Without a decision by year-end, U.S. Farm policy would revert back to the Agriculture Act of 1949, which makes milk go up based on inflation, causing that swell in the supermarket.