Higher Milk Prices?

From the Las Vegas Sun: Forget the fiscal crisis and the automatic budget cuts. Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating to the Truman presidency.
Lost in the political standoff between the Obama administration and congressional Republicans over the budget is a virtually forgotten impasse over a farm bill that covers billions of dollars in agriculture programs. Without last-minute congressional action, the government would have to follow an antiquated 1949 farm law that would force Washington to buy milk at wildly inflated prices, creating higher prices in the dairy case. Milk now costs an average about $3.65 a gallon....
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 steady, and even risen slightly in recent years, dairy farmers usually do better by selling their products commercially rather than to the government.
But if 1949 rules goes into effect, the government would be required to purchase 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.  http://www.lasvegassun.com/news/2012/dec/22/fiscal-cliff-could-mean-8-gallon-milk/
The best solution is for the government to get out of the farm business and let economics take it's course.  But of course, politicians are beholden to the farmers instead of the consumers.