Milk Price Increase Looms

Unless Congress acts before September 30th U.S. agricultural policy will revert to the Agricultural Act of 1949. Why 1949? Because that was the last time Congress authorized federal farm programs on a PERMANENT basis. If the policy is allowed to fall back 64 years, farmers will watch most of their heavily negotiated "safety net" slip away while America's dairy producers would see a marked INCREASE in profits. If Congress fails to pass a new Farm Bill by September 30 -- or extend key aspects of existing law -- provisions kick-in that would double milk prices to over $6 per gallon. Most dairy producers only see trouble if the six-decade old law is allowed to take effect. Some farmers are already selling their milk at -- or below -- the cost of production and are concerned consumers will stop buying dairy products due to inflated prices. Both House and Senate Agriculture Committees proposed changes to the dairy safety net. There were two in the Senate version of the 2013 Farm Bill that passed last month. The first was a margin protection program to pay farmers when the price difference between milk and feed shrinks to a certain point. And the second was a market stabilization program that would require farmers to either reduce the amount of milk produced when prices drop too low or give up a portion of their margin protection payments. USDA would divert the money to purchase and donate dairy products to food banks. Both provisions were originally part of the House version of the bill but Republicans on the House Agriculture Committee voted to remove the market stabilization program. Ranking member Congressman Colin Peterson, a Democrat from Minnesota, said the change soured several Democrats on the omnibus bill and the measure failed to pass. Despite any political wrangling that will inevitably take place, the clock is ticking and Congress has less than 90-days to come up with a solution.