The Price of Milk To Double Without a Farm Bill

Did you know milk, cheese, and other dairy products could double in January if the farm bill isn't passed before the new year?

At first I thought this was a veiled threat from the farm lobby to get their subsidies, but it looks like it goes deeper than that. In fact, farmers don't want the price to go up because they fear they'll be swimming in unsold milk.

"Few will buy milk the USDA will be forced to sell at prices consumers can’t afford, so Congress has no alternative but to stop the change," UW-Madison agriculture economist Bruce Jones told the Wisconsin State Journal. "We’ll be swimming in milk, with nobody to consume it."

He added that the dairy industry would experience a short-term windfall but the lack of demand would cause milk prices to eventually plummet which would be a catastrophe for dairy farmers.

But what is responsible for the price of milk, and why would it double without a farm bill?

The price of milk is not set by the free market as Jones suggests. It's set by USDA regulators that claim to use market indicators and a "variety of pricing regulations":

Over the past 125 years, a complex system of both public and private pricing institutions has evolved to deal with milk production, assembly, and distribution. The pricing of milk in the United States is part market-determined, and part publicly administered through a wide variety of pricing regulations. (Source: USDA)

This complex system is said to be used to create a balance between supply and demand to take the following into account:

Continue reading at: http://www.activistpost.com/2012/12/the-price-of-milk-to-double-wit...

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Permalink Reply by Charles Royer Sr. on December 28, 2012 at 4:29pm

I'll gladly pay $7 a gallon if they cut FOOD STAMPS , the real farm bill!

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Permalink Reply by apeman2502 on December 28, 2012 at 5:31pm

Just like applied science technologies and the technologies of exploitation become more ruthless and exoteric with time, the advancement in sophistication and the benefit of advanced warning from improved communications networks has advanced the science and applied science of defensive action against oppressors. The richest financial entity on the planet begot the leviathan resource exploitation to get there. Thus, they will fall with the farm. The chat in an upper economic class neighborhood Starbucks is more full of lies, deceit, and bigotry than the Starbucks in a college town.

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Permalink Reply by Bildo on December 28, 2012 at 11:28pm

Time to buy a paint can shaker and start getting some cream from my sisters farm. But for now, we're going to pick up major pounds of butter and cheese tomorrow, the 29th.

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Permalink Reply by MAC on December 29, 2012 at 1:09am

Sounds like the farmers need to dump the dairy association and go with the free market, competition will keep prices down and weed out the price gougers