U.S. retail milk prices could rise sharply in 2013 - to $8 per gallon from the current level of about $3.53 if lawmakers don't pass a new farm bill by Jan. 1.

The bill includes the Dairy Product Price Support Program that keeps the minimum price for milk, or the support price. The proposed bill would replace the last farm bill expired in September but has been operating under an extension .

Pressure has been rising from the Agriculture Department and dairy groups for Congress to take act by year-end - if not on the entire farm bill, then at least on an extension or a specific "patch" to address the dairy program.

"USDA continues to review a variety of options for administering programs, show permanent law become legally effective on January 1," a spokesman said.

The International Dairy Foods Association, which represents companies that provide about 85 percent of the bottled milk, ice cream and cheese to U.S. consumers, is hopeful that Congress will succeed in passing a farm bill extension.

"The worst outcome would be for us to continue to see Congress do nothing, and for permanent law to come into effect," USDA Secretary Tom Vilsack said.

The process "will enable stakeholders, not just dairy producers and processors but also food manufacturers, food retailers and others, to voice their concerns prior to the implementation of any new rule," IDFA President Connie Tipton said in a letter to Vilsack dated December 27.