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Milk and Dairy Prices set to skyrocket because of Congressional Failure

  • IggyPride00
    As if there hasn't been enough Fail circulating around capital hill of late, the newest chapter that has gone un-noticed because of the fiscal cliff stuff is that milk prices are on the verge of doubling from just over $3 a gallon to $6-8 a gallon if a new farm bill is not passed by the end of the year.

    Some how failure to pass a farm bill is going to revert us back to 1949 post war policy and require the government buy dairy products at around $40 per hundredweight. That is double what is paid today. That is because it is based on production costs in 1949 when milking was still almost all by hand, and then adjusted for inflation.

    This will throw the dairy market into chaos as it will jack up costs for those down the line who use dairy byproducts.
    Under the current program, the government sets a minimum price to cover dairy farmers’ production costs. If the market price drops below that, the government buys dairy products from farmers to buoy prices and increase demand. Since milk prices have remained above that minimum price in recent years, dairy farmers usually do better by selling their products commercially rather than to the government.
    If the farm bill lapses, then everyone will be selling to the government as the market won't sustain paying that type of price.

    Hence why it will be a crisis.

    Everything has to be a struggle though. We can't ever seem to get anything done anymore without a sword hanging over our heads.

    The House needs to get its ass in gear when they get back and start dealing with some of this stuff.

    http://www.msnbc.msn.com/id/50268211/ns/business-us_business/#.UNTX73f08pc
  • gut
    Somehow I don't think the govt actually buys the physical milk...they cut a check for the difference. It's a subsidy, and we pay indirectly (for those of us who pay taxes) but milk won't be $8/ga at the store.
  • sleeper
    Get the government out of the free market. Problem solved.
  • IggyPride00
    gut;1348835 wrote:Somehow I don't think the govt actually buys the physical milk...they cut a check for the difference. It's a subsidy, and we pay indirectly (for those of us who pay taxes) but milk won't be $8/ga at the store.
    They discussed in the article that many major food producers have been looking into overseas supplies, so if it was just cutting a check for the difference I don't think there would be any concern.

    The government does take ownership of it when they buy it I think, because this isn't an insurance program which would be more along the lines of what you describe. I do think if they are cutting a check for the price the law mandates they do take ownership.
  • Midstate01
    A gallon of milk is already almost $7 here....
  • gut
    I think you're right. It's an old law where, at the time, they probably thought the govt could [always] influence prices by buying (and then presumably destroying) supply. But these days they just do subsidies.

    I'm a bit leary of that article, to be honest (loaded with hyperbole and assumption). Worst case scenario I'd see is govt buys it, and then rather than take physical possession they broker the farmers to sell and distribute. There's not even a market where the govt would transact (buy & take delivery) to do what this article claims.
  • IggyPride00
    gut;1348843 wrote:I think you're right. It's an old law where, at the time, they probably thought the govt could [always] influence prices by buying (and then presumably destroying) supply. But these days they just do subsidies.

    I'm just leary of anything coming from MSNBC, to be honest.
    It's a New York times article reprint.
    Worst case scenario I'd see is govt buys it, and then rather than take physical possession they broker the farmers to sell and distribute.
    That would probably take some kind of law as well it seems.
  • gut
    IggyPride00;1348844 wrote:It's a New York times article reprint.
    Yeah, I saw that. Doesn't change much. There's not even a market or mechanism for the govt to buy and take delivery. That article is just full of hyperbole and bad assumptions.
  • BGFalcons82
    sleeper;1348836 wrote:Get the government out of the free market. Problem solved.
    No No No Sleeper. Bigger and more intrusive federal government won the day last month, hence the only solution to a goveenment-created problem is....you know it...MORE government control and "fixes"!!! Our leaders are so much smarter than the fools on farms, right?!
  • Azubuike24
    Drinking pasteurized milk offers zero nutritional benefit and contributes to the metabolic disregulation that plagues society. It's a dead food. All of the so-called "nutrition" from milk can be attained in a variety of other foods without any of the side effects.
  • WebFire
    What are the side effects?
  • BoatShoes
    Azubuike24;1349594 wrote:Drinking pasteurized milk offers zero nutritional benefit and contributes to the metabolic disregulation that plagues society. It's a dead food. All of the so-called "nutrition" from milk can be attained in a variety of other foods without any of the side effects.
    This!

    As an aside from this article and the thread topic...it would probably be better for everyone if people stopped drinking milk.
  • majorspark
    The federal government promoted the message that milk does the body good and milk mustaches were hip. Are you telling me the feds are motivated by something other than the general welfare of its citizens?
  • GoChiefs
    A deal was reached today to prevent spike in milk prices.
  • queencitybuckeye
    GoChiefs;1354171 wrote:A deal was reached today to prevent spike in milk prices.
    More or less. They kicked the can down the road for another year. Sad that this comes as close as they get to doing their job.
  • tk421
    That's all Congress ever does.
  • jhay78
    Azubuike24;1349594 wrote:Drinking pasteurized milk offers zero nutritional benefit and contributes to the metabolic disregulation that plagues society. It's a dead food. All of the so-called "nutrition" from milk can be attained in a variety of other foods without any of the side effects.
    I don't know about "zero" nutritional benefit, but raw milk (if you can find access to it, being illegal to buy and sell in Ohio)has way more benefits than your typical store-bought pasteurized milk.

    I would argue that the abundance/cheapness and over-consumption of nutritionally bankrupt grains has a lot more to do with society's metabolic and digestive problems.

    (Since the topic of the thread has been resolved, I thought it would be more fun to prolong the nutrition debate).
  • majorspark
    Thank God the feds stepped in once again to save us.
  • believer
    majorspark;1354331 wrote:Thank God the feds stepped in once again to save us.
    Indeed. It has restored my faith in benevolent Big Government. :thumbup:
  • Devils Advocate