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Agriculture Secretary Vilsack warns of higher milk prices

PHOENIX — U.S. Agriculture Secretary Tom Vilsack is warning that you could soon be paying as much as $7 for a gallon of milk.

It’s because an agriculture bill that provides government subsidies to farmers expired last summer.

Vilsack says that if a new farm bill isn’t passed soon, Congress may have to revert to a 1949 law that forces the government to buy milk from farmers at twice today’s average price of $3.65 a gallon. Vilsack says the government could then pass those costs along to you.

But United Dairymen of Arizona CEO Keith Murfield doesn’t think that’s going to happen.

“Even if the farm bill does not get signed, and the financial cliff happens, I don’t see any changes in the milk price,” Murfield said. “In fact, in January, we’re going to see the milk price go down 20 cents a gallon from December.”

That’s because milk prices are tied to butter and cheese. “The butter powder market and the cheese market have dropped in the last month, which will affect the price of what we drink out of the bottle from the stores,” said Murfield.

But Murfield says if congressional Republicans and President Obama don’t come to an agreement to avert the “fiscal cliff,” the earliest that we could see an impact on milk prices would be in March.

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