Under the current program, the government sets a minimum price to cover dairy farmers’ production costs. If the market price drops below that, the government buys dairy products from farmers to buoy prices and increase demand. Since milk prices have remained above that minimum price in recent years, dairy farmers usually do better by selling their products commercially rather than to the government.
But if 1949 rules go into effect, the government would be required to buy dairy products at around $40 per hundredweight — roughly twice the current market price — to drive up the price of milk to cover dairy producers’ cost.
“It would be bad for consumer demand in the long run,” said Chris Galen, a spokesman for the National Milk Producers Federation, which represents more than 32,000 dairy farmers.
Friday, December 21, 2012
With Farm Bill Stalled, Consumers May Face Soaring Milk Prices
Why are we letting the government determine the prices? Each and everytime they manage to always SCREW things up. We really need to take this power away from them. $6-$8 a gallon? Unbelievable. Are we going to be held hostage by O'Bama on this, too?