The fiscal cliff isn’t the only piece of unfinished business in the U.S. Congress. The nation’s annual "farm bill," which has a major impact on food prices expired three months ago. If it’s not renewed soon, food costs will go up and other programs that support American farmers will expire.
American dairy producers say milk does a body good, but it won’t be doing the American wallet any good. if the U.S. Congress doesn’t pass a new Farm Bill by the end of 2012.
It’s got the nation’s agriculture secretary sounding the alarm.
Tom Vilsack, US secretary of Agriculture, said, "Well, if you like anything made with milk you are going to be impacted by the fact there is no Farm Bill. Because if there is not an extension of the existing bill or a new bill basically on January first or shortly thereafter, permanent agriculture law goes back into place, 1949 law, which basically means the government, the federal government would go back in the business of strongly supporting, and I mean strongly supporting the Dairy industry by raising the price support if you will or support for dairy products to $38 dollars a hundred weight that’s almost double what the price of milk is today."
So an average gallon of milk costs three dollars and sixty-five cents today could soon cost more than seven dollars.
"That would be a pretty big impact." "We’d probably still be going thru it but maybe cut down on other things."
Dave Drennan, Missouri Dairy Association, said, "If dairy prices rise too fast to a higher level that folks can’t afford, there are so many alternatives in the market place, from the power drinks, the nutrition drinks, the sodas, the waters and all that that competition people will switch."
The farm bill also includes funding for food production and export, air, forest and water conservation and ways to help farmers maintain rural areas and farm land, all of it stalled until passage. One Financial Analyst says any increase in food prices means American families will lose more of their disposable income.
Juli Niemann, financial analyst, said, "When you’re only paying a certain percentage of your income in food and that percentage starts rising, then you have less money to spend on toys, games, prizes, clothing, furniture, in other words discretionary items."