Dairy Cliff: Washington's Woes May Affect the Price of Milk

If the fiscal cliff does not worry you, the "dairy cliff" might. If Congress does not pass an agriculture bill before the end of the year, a gallon of milk could cost about $7 sometime in the new year.

A representative for Congressman Frank Lucas, the Chairman of the Agriculture Committee, told Channel 8 the 2008 agriculture bill expired in September. It said the government would buy milk if its price dropped to half of the national average to protect farmers.

Without a congressional decision, the country could revert back to a 1949 statute, which would force the government to pay double today's price. According to CNN, the national average is $3.65 a gallon, although the cost in Tulsa is more than $4. However, Lucas's rep said this is ancient agriculture policy. She said if Congress does not reach a decision, the USDA would likely maintain its current policy until permanent legislation is implemented. That means there should not be immediate price increases.

Of the possible price increases, one Tulsa milk drinker told Channel 8, "I'd probably quit drinking it." Another shopper said it would not phase her family.

Lucas's rep said there is a chance Congress will lump the farm bill with the fiscal cliff legislation. She said Oklahoma farmers need the legislation to pass to help decrease costs after recent expensive droughts.

The USDA said not having a government safety net could influence lenders to withhold credit from dairy producers.