Farm Bill passes, milk prices expected to drop

BATON ROUGE, LA (WAFB) - Consumers can soon expect to see the biggest drop in milk prices in years.

The federal government has finalized the Farm Bill, giving growers the option of buying insurance to cover the difference when milk and feed prices shrink. The savings are typically passed to the consumer.

The dairy aisle at Calandro's is stocked with any kind of milk product you can imagine. It's a staple on most grocery shopping lists.

"I usually get a half gallon every couple of weeks," Phyllis Berthelot said.

While milk is a hot item, the prices are hard to ignore.

"I've noticed it's all gone up," Susan Fogleman said.

It has gone up because the Farm Bill, which gives farmers subsidies when production hits a slump, expired in 2012.

Fourth generation dairy farmer and producer, Jeff Kleinpeter, and his family raise a herd of hundreds of cows. But the company also buys raw milk from other dairy farmers. The government sets those prices. In February of 2013, Kleinpeter said, he paid $22.51 for one hundred pounds of raw milk. A year later, it jumped to $26.32. That translates into a 17% increase.

"In my 27 years of being here I've never seen it that high before. We saw seven raw milk cost increases for 2013, but we went up only one time on our price," Kleinpeter said.

Kleinpeter said he had to start doing little things that make a big difference, like measuring the thickness of the plastic jugs to make sure too much of the product isn't being used.

Producers can relax with the passage of the Farm Bill. Since it decreases the risk associated with planting crops like grain, which cows eat, farmers will plant more of it. Kleinpeter said, when grain prices go down, the cost of milk usually follows.

"I'm going to predict we're going to see a 30 cent decrease per gallon in stores," Kleinpeter said.

That is great news for shoppers like Susan Fogelman who not only buys milk but understands the industry too.

"I grew up in the country here in Louisiana and some of my family had dairy and I know that's hard work, and we were always taught to drink three cups of milk a day," Fogleman said.

With prices expected to fall Fogelman said she might get back to that routine.

Kleinpeter said consumers can expect to see milk prices drop at the stores in the next two months.

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