Farm Bill Update: Still on the Precipice of the Imaginary Cliff
By Patty Lovera
The breaking news on the farm bill is that there really isn’t any actual news. There are rumors (so many rumors…), theories, shifting scenarios, and an abundance of opinions, but no concrete progress or clear path forward.
To recap: the 2008 Farm Bill expired at the end of September. The full Senate passed their version of a new Farm Bill in April; the House bill made it out of the Agriculture Committee but has not been passed by the full House. We’re out of time in this Congress for the bill to pass in a normal fashion (passage by the full House and then using a conference committee to negotiate the differences between the House and Senate versions).
This Congress only has a few days left and their main priority is to deal with the supposed ‘fiscal cliff.’ There is much debate about whether a fiscal cliff bill would serve as a vehicle for attaching some farm bill package – whether that is a full farm bill or an extension of the 2008 farm bill. If that happens (and that seems to be a pretty big if), it’s not clear yet whether the language would come from the House or the Senate versions of the farm bill, or some combination.
So with that crystal-clear prediction of what’s next, here’s one more complicated nugget to chew on: what happens if nothing happens by the end of the year? Since the last farm bill expired several months ago, what is happening with all the programs that the farm bill creates? We talked about some of the important conservation and sustainable farming programs that are left behind until a new farm bill re-establishes them, but there are other delayed impacts that took a few months to come into play.
One is the price of milk. I’m not going to try to explain dairy pricing here (and couldn’t even if I tried). But in January, the rules for how milk prices are determined will change dramatically because we will revert to laws from 1938 and 1949. The old laws require USDA to consider historic prices for milk (called “parity”) that would be about double what dairy farmers currently receive, and to use the purchasing power of the USDA to buy up dairy products at a rate that would achieve that price in the market. The question is how fast (or not) USDA acts to actually make these changes, given the impact it could have on the cost of milk to food processors and consumers. Super clear, I know.
So expect to see threats about rising milk prices enter into the discussion, So, just in case you weren’t already sick of references to diving off the fiscal cliff, we will now be overwhelmed with speculation over the milk cliff. And stay tuned to find out whether or not Congress actually gets around to doing a farm bill before the New Year’s ball drops in Times Square.