Dairy Cliff Update: Deal Reached for Stopping Spike in Milk Prices

Dairy Cliff Update: Deal Reached for Stopping Spike in Milk PricesBy ALAN FRAM and MARY CLARE JALONICK

WASHINGTON (AP) - The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that could head off a possible doubling of milk prices next month.

Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., indicated the House could vote on the bill soon, though House leaders have not yet agreed to put the bill on the floor. In addition to the one-year extension that has the backing of the committees, the House GOP is also considering two other extension bills: a one-month extension and an even smaller bill that would merely extend dairy policy that expires Jan. 1.

Expiration of those dairy programs could mean higher prices at the grocery store within a few weeks. Agriculture Secretary Tom Vilsack said Americans face the prospect of paying $7 for a gallon of milk if the current dairy program lapsed and the government returned to a 1948 formula for calculating milk price supports.

A spokesman for House Speaker John Boehner said Sunday that Republican leaders had not decided how they would proceed on the farm extension, though a vote could come as soon as Monday. Boehner has pushed back on passage of a new five-year 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 prospect of higher milk prices has motivated some action. The bipartisan extension also includes disaster assistance to farmers affected by a lingering drought this year, along with extensions to other farm programs that expired in October.

Instead of just extending current dairy policy, the extension bill includes an overhaul of dairy programs that was included in both the Senate and House committee bills. The new dairy programs include a new, voluntary insurance program for dairy producers. 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 current 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 their costs.

Stabenow blamed Boehner for getting to the point where an extension is the only option. "The lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension," she said.

One of the reasons Boehner has balked at bringing up a farm bill is disagreement within his caucus over how much money should be cut from food stamps, which make up roughly 80 percent of the half-trillion-dollar bill's cost over five years. House Agriculture Chairman Frank Lucas, R-Okla., has unsuccessfully pushed his leadership for months to move on the legislation despite the disagreement over food aid.

On Sunday, Lucas said he hoped the extension would pass both chambers quickly as GOP leadership mulled their options.

"It is not perfect - no compromise ever is - but it is my sincere hope that it will pass the House and Senate and be signed by the president by Jan. 1," he said.

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What are we doing in the dairy business ? Didn't we learn from Government Motors ?
But then the government is in soybeans, sugar, ethoynal, airplane building, mosque construction, etc.
BUT, Obama cannot cut one penny of entitlements.

January 01 2013 at 12:00 PM Report abuse +1 rate up rate down Reply

almond milk is healthier

January 01 2013 at 10:36 AM Report abuse -1 rate up rate down Reply

Well, farm subsidies... we have to eat but we don't have to eat 'high on the hog". I have never bought a t-bone steak. I find the price of t-bone would ruin my food budget. Many on food subsidies, food stamps, think they should have anything they want. Don't think the system was set up for that...The intent was and is that no family should starve in this country. That doesn't mean they should have the best of everything. Cut down on what food stamps can be used for. It is that simple... Milk is important for children but as we grow older, milk has little nutritional value. I still like it! Good that we could stop a huge rise in the price.

January 01 2013 at 10:11 AM Report abuse +1 rate up rate down Reply

Ha Ha Dairy Cliff. That just sounds funny. Well thank God about the milk news.

January 01 2013 at 9:20 AM Report abuse rate up rate down Reply
1 reply to kristij2013's comment

God didn't give you that cow. The government did.

January 01 2013 at 12:01 PM Report abuse +1 rate up rate down Reply

If milk had gone up to $7 per gallon, I'd be buying a milk cow.

January 01 2013 at 9:05 AM Report abuse +2 rate up rate down Reply

I believe it would be a fair question to ask: why do we pay more for a gallon of soda than a gallon of milk?
Let the price of milk go up to a reasonable level where everyone can make a profit. There is no reason the government should be involved in the price of milk. These comments come from a person that has worked in the dairy industry for 30+ years.

December 31 2012 at 6:00 PM Report abuse +2 rate up rate down Reply