"If you like anything made with milk, you're going to be impacted by the fact that there's no farm bill," said Secretary Tim Vilsack in a recent interview.
National Milk Producers Federation spokesman Chris Galen called the possibility that milk prices may double -- from the current average of $3.65 a gallon -- the "dairy cliff," CNN reported Saturday.
Many of the federation's 30,000 dairy farmer members fear a consumer revolt if milk prices double, with shoppers turning to other beverages and using milk replacement products, like soy milk.
There is time for Congress to intervene, with a stop-gap pricing agreement that would prevent the price from rising until a new farm bill was in place, but as matters stand the farm bill expired in the summer and several provisions are coming to the end of their shelf-life, which is Jan. 1 for the milk subsidy provision.
The government keeps the price of milk up by buying dairy products if the price falls below a set threshold. If the subsidy ends Jan. 1, the government would have to use a default formula -- a pricing formula set up in 1949 -- that would force the government to buy milk at about twice the current price.
In the meantime, Congress has been preoccupied with the other cliff, the so-called fiscal cliff, the combination of $500 billion in spending cuts and tax hikes that would take effect Jan. 1 if a compromise budget bill is not passed.
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