GOP obstinacy may force milk price spike

Updated
 
GOP obstinacy may force milk price spike
GOP obstinacy may force milk price spike
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With 2012 very nearly over, it’s deeply unfortunate that there’s still a lengthy list of bills that need to be approved before the calendar turns over. The tax and spending measures related to ongoing fiscal talks are getting the bulk of the attention, but some important policies, including the Violence Against Women Act, are also awaiting action.

And then there’s the pending farm bill, which, like everything else, has stalled in the face of Republican opposition. Assuming the GOP refuses to act, there will be real consequences for millions of American consumers, and it’s likely much of the public doesn’t realize what’s coming.

Forget the fiscal crisis and the automatic budget cuts. Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating back to the Truman presidency.

Lost in the political standoff between the Obama administration and Congressional Republicans over the budget is a virtually forgotten impasse over a farm bill that covers billions of dollars in agriculture programs. Without last-minute Congressional action, the government would have to follow an antiquated 1949 farm law that would force Washington to buy milk at wildly inflated prices, creating higher prices in the dairy case. Milk now costs an average of $3.65 a gallon.

Higher prices would be based on what dairy farm production costs were in 1949, when milk production was almost all done by hand. Because of adjustments for inflation and other technical formulas, the government would be forced by law to buy milk at roughly twice the current market prices to maintain a stable milk market.

The market, however, wouldn’t be stable at all.

The most likely scenario would be farmers moving to sell dairy products to the government at the inflated prices, which in turn would limit consumer supply and cause huge price spikes on the commercial market. It’s also likely companies that use dairy products would look to imported milk from overseas.

So, what’s the problem? The Senate version of the farm bill passed with relative ease over the summer, but House Republicans haven’t even brought a competing proposal to the floor for a vote. GOP leaders haven’t made specific demands, but the proposal Republicans supported in committee included sharp spending cuts to measures such as nutrition assistance programs, in the hopes of making millions of low-income Americans ineligible for food stamps.

House Democrats hope to force the issue with a discharge petition, but do not yet have enough GOP support to push the farm bill to the floor, and time is obviously running out.

Farm Bill and Agriculture

GOP obstinacy may force milk price spike

Updated