Fearful of the consequences of milk prices rising to $8 a gallon, U.S. House and Senate conferees have agreed to extend the 2008 Farm Bill for another year. Had a deal not been reached, the 1949 version of the bill would have gone into effect, requiring the federal government to support a milk price of more than $38 per hundredweight (about 9 gallons), much higher than the current price of $18.
According to a report at Bloomberg News:
[T]hree farm-related bills were filed Saturday in the House of Representatives; all of them would stave off the potential jump in consumer milk prices should government commodity programs begin to lapse Jan. 1. One would extend current law, along with disaster aid for producers affected by this year's U.S. drought and changes to current milk policy. The second measure is a shorter-term extension, and the third would protect only against possible dairy-price spikes.
The Senate passed a new Farm Bill in June, but the House has been unable reach agreement on the nutrition program - called SNAP, the current term for food stamps - and a new dairy assistance program. Details of the reported agreement are not yet available.
Filed under: 24/7 Wall St. Wire, Agriculture, Law