Posted By RichC on December 9, 2013
As a conservative, government intrusion into the private sector is something I have difficulty in supporting. Unfortunately in the United States we’ve at least partially embraced the idea that government will regulate crucial areas of our economy in order to keep prices affordable for the masses. Utilities and food items come to mind and the latter has been in place since 1949 as the “farm bill.” Without going into a political rant about our adding health care to the list of “crucial areas” we expect government to control and keep affordable – cough, cough — we’re now facing a deadline in order to renew or a change the existing decades long farm bill … last renewed in 2008.
What this means to consumers is that food prices could skyrocket if the existing support expires … and in my opinion would impact most citizens. According to business reporting, milk prices could “soar to $8 a gallon” causing a significant price rise for grocery shoppers.
Experts are expecting an outcome less obvious than just sticker shock as to the “real” price of milk and dairy for consumers … instead they suggest that consumers will reduce their purchase of dairy and that the glut of higher price milk to pinch farmers who will no long have a market for their product (farmers won’t receive the subsidies from the federal government or be able to sell higher priced milk — ouch!) Instead, they will see a loss of income and be required to slaughter their milk cows — “domestic demand for dairy products would fall by an estimated 9 percent, and exports, which have seen much growth over the past decade, would likely disappear as the cost of U.S. dairy products would become prohibitively expensive.”
So what’s the answer?
Most likely another round of kicking the can down the road and according to Chris Galen, senior vice president for the National Milk Producers, it is “likely that Congress will pass either a short-term extension of the bill until early 2014 when they’ll hammer out a new bill or another 12-month extension or possibly even 24 months.” We’ll see?