Price of milk could double due to government shutdown

Price of milk could double due to government shutdown

POSTED: Friday, October 4, 2013 - 5:54pm

UPDATED: Friday, October 4, 2013 - 5:56pm

The stalemate in Washington could mean higher grocery prices.  With Congress locked up not passing a budget, it means they're not likely to pass a new farm bill either.

That means you could see higher prices at the grocery store for stuff like milk, cheese and butter.

When the government shut down Monday at midnght, it also marked the expiration of the latest farm bill.  The bill does a lot of things, including managing food stamps, and regulating crop insurance. That regulation helps give farmers a cash buffer.  Without it, the cost of maintaining their livestock can easily outweigh the sales they make.

The bad part is there's a trickle-down effect, the Farm Bureau said come January, consumers will face the impact of the higher costs farmers are paying to feed and transport their livestock.

One New York agriculture representative said that means the price for milk may double in the coming months from $3 to $6 per gallon.  That could ripple to other milk-dependent foods like cheese and butter.

Analysts expect Congress to extend the law for another year or two, rather than agree on a new bill, but it's not clear when that might happen.

If lawmakers don't take action soon, it'll be bad news for all of us.  Many shoppers aren't going to be willing to pay so much for a gallon of milk, and without making those sales farmers - especially in smaller markets - are at risk of going out of business.

The timing isn't great.  Prices for so many groceries have already been going up.  A gallon of milk has already risen a quarter this year.  Bread and orange juice prices are also up.

The problem feels even worse, since wages for american workers are basically stagnant.

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