Milk prices could go up to $6 or even $8 a gallon in the new year if Congress doesn't act soon.
The threat of what dairy industry officials are calling the "milk cliff" looms as Washington is preoccupied with negotiating a deal to avoid the "fiscal cliff" -- $500 billion in automatic tax hikes and spending cuts that would begin Jan. 1.
Unless Congress passes a new farm bill by New Year's Day, an antiquated dairy pricing formula will kick in. This system is based on production costs in the 1940s when everything was done by hand. The formula would force the government to buy dairy products at roughly twice the current market price, which would drive up costs for everyone. Milk sells at an average of $3.65 a gallon, the New York Times said
The higher prices could force consumers and the makers of dairy products like butter, cheese, and yogurt to seek out cheaper alternatives like soy milk or cow's milk imported from other countries, the article said.
Via the New York Times