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'Dairy Cliff" Looming

'Dairy Cliff" Looming

By Brian Miller. CREATED Dec 14, 2012

 SEYMOUR-- The pending fiscal cliff is getting all the attention, but a so-called dairy cliff is also looming. If lawmakers don't pass a new farming bill soon, analysts say the price of milk could shoot up to $6 a gallon next year. 

 

Heading over the dairy cliff could actually help small dairy farmers like Robert Letter-- at least in the short term.

"Oh I would live it (laughs) but I don't think it will happen, but if it did, I guess you wouldn't be disturbed if you got a double raise in your wages, said dairy farmer Robert Letter.

Letter and his son Russell have been in the dairy business together for 30 years, selling most of their milk to a local cheese maker.

If Congress does not act, the farming bill would no longer control milk prices.

Going over this cliff would set milk prices to what 1949 levels. Then it would be adjusted for inflation, doubling the price we pay today.  

What could help some farmers will hurt consumers like Rebecca Ruatti, who  says higher prices will force her to cut back.

“It would be money coming out of his diapers or we wouldn't be able to afford milk because I have other needs too, so that would be very traumatic,” she said.

Industry experts say supermarkets would absorb most of the cost initially, but would eventually be forced to raise dairy prices to record levels.