Farmers worry about 'dairy cliff'

Industry officials say milk prices could double

Farmers worry about 'dairy cliff'

LAS CRUCES, N.M. - You've likely heard of the 'fiscal cliff', but what about the 'dairy cliff'?

Industry officials tell ABC News the price of milk could double if Congress doesn't take action -- and soon.

Forgotten among the struggle over looming tax increases and spending cuts is the Farm Bill, a bill that could impact the entire dairy industry and milk lovers across the country.

At grocery stores across the country, the top item on many shoppers' lists is milk.

"I buy it every week. I buy soy milk, whole milk and I buy 2 percent milk," grocery shopper Lorraine Rocks told ABC-7.

"It's definitely one of the top five for sure. People come in, (buy) milk, bread, eggs and bananas, so its definitely a top-five item," said Toucan Market manager Robert Baur.

The Farm Bill is basically an agreement between the federal government and dairy farmers that the government will step in and buy surplus milk when prices drop too low.

The current bill, passed in 2008, expired in September. On Jan. 1, the law will revert back to the 1949 version. Industry officials said that would force the government to buy milk at around double the current price. Farmers would sell their dairy products to the government instead of the private market and store prices would surge. Then prices might collapse as the government eventually sold its dairy stockpiles.

Las Cruces shoppers told ABC-7 they'd cut back on milk if the price doubled.

"I'd buy soy milk. I'd force my husband to drink soy milk," Rocks said.

"Prices are going up everywhere and the last thing we need is more price hikes on food items," another grocery shopper, Toby Casci, said.

Many dairy farmers fear the price hikes would hurt the American dairy industry when consumers stop drinking milk or find alternatives.

In a letter to Speaker of the House John Boehner, the Dairy Farmers of America Inc., urged Congress to pass the bill before the deadline, writing, "Dairy farmers need your leadership now more than ever."

As the cliff looms, Las Crucens said they just hope for the best.

"We'll have to wait and see. I have optimism that everything will turn out okay. Hopefully it won't happen but we need to be prepared," Rocks said.

"Maybe they'll pay that. It's just like gas prices. They go up and people still continue to drive their vehicles. There are alternatives, but people still want to drive," Baur said.

Agriculture industry leaders hope the farm legislation can be added to any final fiscal package before the end of the year. At the very least, they hope Congress will extend the current bill for a temporary fix.

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