The Daily Item, Sunbury, PA

Line Mountain Region

January 4, 2013

Congress takes the threat of expensive milk off the table

MANDATA — The threat of milk doubling in price has been avoided as part of the compromise the White House and congressional bargainers reached on wide-ranging legislation to avert the fiscal cliff.

Buried in the 157-page fiscal cliff bill, H.R. 8, was a 9-month extension of the Farm Bill that expired in September. That bill includes language keeping milk prices from rising, but excludes other provisions like energy and disaster aid for farmers.

The extension runs through September.

“I don’t think there was ever a realistic chance that milk prices could have reached the $6 to $8 level, although I suppose it was a possibility,” said Mark O’Neill, a spokesman for the Pennsylvania Farm Bureau. “Even if Congress hadn’t dealt with the issue, there were several options that the secretary of agriculture could have taken that would have indefinitely delayed the price hikes. Most farmers I know never believed prices would jump that high.”

The Pennsylvania Farm Bureau had been pushing for passage of a new Farm Bill for about a year. “Ideally, we’d like to see a new 5-year Farm Bill,” O’Neill said, “but we’ve been told that Congress is still working on it. We’ll see. I think the so-called dairy cliff was dealt with now because no politician wanted to be blamed for doubling the price of milk.”

House Speaker John Boehner, R-Ohio, had pushed back on passage of a new Farm Bill for months, saying there were not enough votes to bring it to the House floor after the House Agriculture Committee approved it in July. The Senate passed its version of a Farm Bill in June.

The bill covers food stamps, farm subsidies and other assistance for rural areas.

But, the prospect of higher milk prices prompted some action. U.S. Department of Agriculture Secretary Tom Vilsack had said Americans faced the prospect of paying $7 for a gallon of milk if the dairy program lapsed and the government returned to a 1949 formula for calculating milk price supports.

Extending the entire Farm Bill would have included an overhaul of dairy programs that was included in the Senate and House committee bills. The new dairy programs include a voluntary insurance program for dairy producers, and those who choose that new program also would have to participate in a market stabilization program that could dictate production cuts when oversupply drives down prices — an idea that hasn’t gone over well with Boehner.

In July, he called the dairy program” Soviet-style” and said the new program would make it even worse.

Large food companies that process and use dairy products have backed Boehner, saying the program could limit milk supplies and increase costs.

 

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