The Congressional fiscal cliff deal also averted the so-called dairy cliff, the expiration of a 2008 farm bill that would have resulted in milk prices almost doubling. However, grocery shoppers can still expect to pay more for dairy products in 2013.
The United States Department of Agriculture projects that dairy prices will increase by up to 4.5% this year, mainly because of effects of the ongoing drought.
If the projection holds, a gallon of milk would increase to $3.81 from the current national average of about $3.65. Other dairy products, like eggs and cheese, are projected to see similar increases.
The silver lining: this year's price increases will likely be less severe than food inflation levels in 2007, 2008 and 2011, said Ricky Volpe, a research economist with the USDA's Economic Research Service
"Will consumers feel it? Absolutely," he said. "But they've seen worse."
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