With congressional lawmakers scrambling to avoid the looming threat of milk prices spiking at the end of the month, it seems fitting that the last debate holding up passage of a new federal Farm Bill deals with price support for the dairy industry.
The U.S. Congress has a tight deadline for avoiding the impacts of the “dairy cliff." But with recent compromises on highly controversial elements of the Farm Bill, the outlook for the legislation is starting to look bright.
The newly emerged debate that is holding up the Farm Bill revolves around finding methods to protect dairy farmers from overproduction. U.S. Rep. Collin Peterson of Minnesota proposed a program that will offer dairy producers a version of profit-margin insurance, but the producers would be obligated to cut milk output if prices fell below a certain level. Dairy farmers are strongly supportive of the proposal while processors of dairy items such as cheese or ice cream are strongly opposed, particularly due to the risk it could raise dairy prices.
House Speaker U.S. Rep. John Boehner vehemently opposes the program as a “Soviet style” attempt at supply control by the government. He said he would not allow the program to be part of the final bill.
Mankato Democrat U.S. Rep. Tim Walz said he supports Peterson's program as a way to protect small dairy operations and prevent the “boom and bust” cycle of dairy prices. He said losing smaller dairy operations would ultimately raise the overall price of dairy and would lead to price instability in the market.
But he said he would be willing to pull the program to ensure the passage of the Farm Bill. He said there are indications Boehner will present an alternative program in the coming days.
Over the cliff