Put down the powdered milk. It looks like milk prices won't rise to $7 a gallon after all.
The nation has escaped going over what the dairy industry named the "milk cliff" now that Congress has passed the fiscal cliff deal that contained a last-minute extension of parts of the 2008 Farm Bill.
The legislative patch will keep dairy cases safe from price hikes through September. It's a temporary fix and puts off decisions on an entirely new farm bill that is needed since the old one expired in September. The Senate passed a full version of the bill in July, but a House version never made it to the floor because of disagreements over issues including how much money should be cut from food stamps, USA Today said.
Without the action from Congress, an antiquated dairy pricing formula would have kicked in. This system was based on production costs in the 1940s when everything was done by hand. The formula would have forced 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 might have forced 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.