Feedback: Milk Prices At $5 A Gallon?

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All eyes are on Washington as lawmakers approach their final week to pass a Farm Bill.

But after months of standstill, can Congress reach a deal before January 31?

"The story changes every day, meaning that a new obstacle comes up or they reach some new agreement and think they're on their way to a final solution and then the next day something else develops. So I'm just hopeful that we get this done," said north country Congressman Bill Owens (D. - 21st District).

Farmers like Mike Keichle agree.

He says the stalemate needs to end.

"Nobody is going to get everything that they want. We just need to settle down and get something so the markets can be stable," said Keichle.

If no Farm Bill is passed, prices would revert to those set by legislation passed in 1949.

But while experts say the law would force dairy prices up, they would not double as some have suggested.

"That would result in increases in the price of butter, the price of cheese, the price of milk in the grocery store. But they wouldn't double, because there's other costs involved in these products besides the cost of milk," said Andrew Novakovic, the E.V. Baker Professor of Agricultural Economics in the Charles H. Dyson School of Applied Economics and Management at Cornell University.

Those costs include things like packaging, shipping and advertising.

Novakovic says if prices were to go up, a gallon of milk would likely cost around $5.

But he says the chance of that happening is zero, because bringing back a 50 year old program would be incredibly disruptive for no good reason.

Novakovic wrote a paper on the subject; read it by clicking on this link.

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Thursday, April 17, 2014
, Watertown, NY

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