Faced with the looming threat of the “dairy cliff” driving up milk prices to $7 per gallon and a stalemate in the debate over regulation of government assistance, Congress' conference committee is scrambling to cobble together a new federal Farm Bill before mid-January.
The “dairy cliff” refers to the impact of Congress' failure to pass a new Farm Bill before the last bill expired in October. When the bill expired, federal laws automatically reverted to the 1949 version of the Farm Bill.
The older Farm Bill is oriented around the agricultural practices during the Truman Administration, which is out of sync with modern farming practices, and lacks the legislative improvements passed during the last 50 years. The distorted funding for milk could drive prices to $6 or $7 per gallon, and the lack of funding for corn and sugar beets could drive up other food costs.
The 1949 law will go into effect Jan. 1, although some federal officials indicated consumers will not see the impact until mid-January.
Negotiations on the Farm Bill have stalled due to strong divides between the Republican-controlled U.S. House and the Democrat-controlled U.S. Senate over the funding levels for food assistance and crop subsidies. Because the House will go on break for the rest of the year this weekend and the Senate next weekend, lawmakers announced that no new Farm Bill will be completed in 2013.
Lawmakers plan to avoid the "dairy cliff" by passing a new Farm Bill before the impacts can take effect after mid-January. However, lawmakers could still face criticism over the "dairy cliff" from constituents when they return home.
Mankato lawmaker U.S. Rep. Tim Walz's office said they were optimistic the Farm Bill could see a vote by Jan. 15 and that negotiations are near completion.
Regardless of how Congress proceeds next month, the conference committee still has to settle the debates over how to implement subsidies to farmers and how deeply to cut the nutrition portion of the bill, which contains food stamp legislation.