WASHINGTON – If the “fiscal cliff” alone is not enough to give you indigestion, here’s a new worry: Milk prices may be about to double as a result of a looming “dairy cliff.”
Thanks to congressional inaction on a new farm bill, the nation is set to revert, on Jan. 1, to federal farm policies that date back to the 1940s.
The impact, farmers and lawmakers say, would be the end of the federal price supports that keep milk prices where they are now, meaning that early next year, a gallon of milk in Erie County could cost nearly $6.80, compared with up to $3.39 today.
Also, everything that you eat or drink that is made at least in part from milk – from pizza toppings to Greek yogurt to white Russians – would cost more.
It’s a scary prospect for families and farmers alike, said Dean Norton, president of the New York Farm Bureau, who spent Wednesday in Washington, lobbying lawmakers to act fast on a new farm bill.
If nothing is done and prices double, “milk consumption will go through the floor,” said Norton, whose family runs a dairy farm in Genesee County. “It would be a serious economic disaster for dairy farmers.”
Day by day, that disaster grows nearer.
Staffers on the House and Senate agriculture committees have been trying to hammer out details of a new five-year farm bill that could pass by the end of the year. As of Wednesday, they remained hung up on a disagreement about commodity price supports, according to sources close to the talks.
If that stalemate continues into January, the price that the government pays for surplus milk under the expiring farm bill would more than double, as the nation reverts to the 1940s-era law that remains the fallback whenever a more modern farm bill is not in effect.
You might think farmers would be happy that the government would suddenly pay more than twice as much for their milk, but instead they are terrified. They say the new, higher government price support for milk will boost prices at the grocery store to levels that consumers will not be willing to pay.
“I haven’t talked to a dairy farmer who’s not seriously concerned,” Norton said.
Sen. Charles E. Schumer, D-N.Y., is seriously concerned, too.
“This is an entirely avoidable and unnecessary burden on families, schools and farmers alike, and it could be easily addressed,” said Schumer, who discussed the issue on a conference call with reporters on Wednesday. “All the leaders of the House of Representatives must do is put the bipartisan Senate farm bill on the floor for a vote, and I’m sure that it will pass.”
The Senate passed its version of the farm bill earlier this year, but the House has been divided over the farm legislation and hasn’t brought a bill to the floor for a vote.
But there’s still time for a deal that can pass both houses, Rep. Tom Reed, R-Corning, said earlier this week.
“The [Agriculture] Committee is working hard, and they’re working in a detailed review of where the Senate is at and where the House is at, and where the Senate is willing to move and where the House is willing to move,” Reed said. “The details are being looked at, and to me, that is a good sign.”
As that happens, Sen. Kirsten E. Gillibrand, a New York Democrat who is on the Agriculture Committee, is working with Sen. Olympia Snowe, R-Maine, to try to get the final bill to include a modern dairy price support provision.
“I am working hard to get a five-year farm bill across the finish line, since dairy farmers deserve the certainty of keeping a safety net in place, especially as feed and fuel prices are at all-time highs,” she said. The trouble is, the House remains stuck as it tries to come up with a way to replace cash subsidies to commodity producers with a loan system.
As a result, “I’m becoming pessimistic” about the possibility of a bill being finalized by the end of the year, House Agriculture Chairman Frank Lucas, R-Okla., told Politico, a Capitol Hill newspaper.