If the farm bill doesn't pass as part of a new budget during fiscal cliff negotiations, the 2008 Farm Bill will expire and could cause the price of milk to jump.
As "fiscal cliff" negotiations brought the entire Congress to standstill, the new Farm Bill has not been passed on time, creating a real possibility that the 1949 Act may once again be the law of the land. If that were to happen, dairy prices, rather than being an outcome of market supply and demand like they currently are and should be, would effectively be set by the U.S. government, at the level that would more than double the retail prices of milk. However, the artificial price increase would not happen overnight. The nuts-and-bolts of the ancient program insure that some weeks would pass before the Secretary of Agriculture would even be able to complete all logistical work so that the government could start with massive purchases of dairy commodities.
Bozic will join The Daily Circuit Thursday, Dec. 27 to talk about how the expiring farm bill will affect Minnesota dairy farmers and consumers. We'll also look at other parts of the bill that could change without a new budget.
Patrick Lunemann, president of the Minnesota Milk Producers Association and a dairy farmer in Minnesota, will also join the discussion.
READ MORE ON THE MILK CLIFF:
Milk prices could double after 'dairy cliff'(MSN)
With farm bill stalled, consumers may face soaring milk prices (New York Times)
Beware the back-door farm bill (Atlantic)
Farm bill is just another victim of politics (The Hill)
Milk, grocery prices on the rise if Congress ignores farm bill (CBS News)
Rep. Kind: We must act now to avoid 'Dairy Cliff' (Wisconsin Ag Connection)