Democrat’s latest farm bill strategy: Threaten to double the price of milk (via The Hill)

The top Democrat on the House Agriculture Committee has launched a new  strategy for passing a farm bill this year: threaten to send milk prices skyrocketing.

Rep.  Collin Peterson (D-Minn.) said he called Secretary of Agriculture Tom Vilsack  this week suggesting that the agency begin the process of implementing the  1949-era dairy policies that would take effect Oct. 1 if Congress fails to act  on a farm bill before then.

“Clearly this is not going to get done by  the 1st of October, so my suggestion to the secretary is that they should  start now putting  the framework together to implement the permanent law on dairy Jan. 1,” Peterson  said Wednesday in the Capitol. “And it sounds to me like they’re going to take a  very serious look at that.”

The 1949 law requires the Agriculture  Department to manipulate the dairy market in such a way that milk is priced at a  floor of roughly $39 per 100 pounds – a figure that would lead milk prices to  roughly double at today’s rates.

Peterson’s strategy is not to see that  happen, but to rouse the affected industry groups – particularly the powerful  International Dairy Foods Association (IDFA) – into pressuring  Speaker  John Boehner (R-Ohio) and other GOP leaders to enact a bill preventing the cost  hike.

“IDFA is really going to hate this,” Peterson said. “And once  Vilsack’s calling them and setting up the mechanism to get $39 milk, IDFA’s  going to call Boehner. So, it might actually work.”

Peterson said his  strategy has the backing of House Minority Leader Nancy Pelosi  (D-Calif.).
Congress has struggled for years to pass a long-term  reauthorization of the farm bill, relying instead on short-term extensions to  existing policy that have prevented the permanent law of 1949 from taking  effect.

In June, the Senate passed a five-year reauthorization bill with  a bipartisan vote of 66-27, but House GOP leaders declined to consider it,  arguing that the $4.1 billion cut in food stamps was not large enough to satisfy  their conservative conference.

Instead, House Republicans carved their  version of the bill into two pieces: The farm policy portion passed in July with  no Democratic support, and GOP leaders are planning this month to bring up a  food stamp bill  expected to cut roughly $40 billion from the program.

Democratic leaders  are warning that a cut of that size – designed to appeal to House conservatives  – has no chance of passing in the Democratically controlled Senate, leaving farm  bill stakeholders to wonder where there’s room for a compromise.

Peterson  thinks his milk strategy can compel the deal that’s so far eluded the  sides.
“The first thing that happens of any consequence is Jan. 1 on  dairy. So if he [Vilsack] starts the process [Oct. 1] then we can be ready to  have $39 milk Jan. 1,” he said. “And then I think, within two or three weeks,  we’ll probably have a farm bill.

“We’re not getting any place with what  we’re doing,” Peterson added. “There’s no reason to not have this done.”

Committee Chairman Frank Lucas (R-Okla.) said Wednesday that Vilsack should start to prepare for the milk spike.

Lucas said he didn’t know exactly why the prices would rise but told a  reporter he’d have to save his beer money to afford milk.

Lucas said leaders have not yet started whipping the food stamp cutting bill they plan to  bring to the floor next week. He said even if House Majority Leader Eric Cantor  (R-Va.) cannot get 217 votes for the measure cutting $40 billion, a farm bill  conference committee would proceed.

Disagreements on food stamp cuts have  been the main obstacle to a farm bill, he said.
“Addressing that  bill, disposing of that bill…up or down…enables us to move forward with the  conference committee process,” Lucas said.

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One thought on “Democrat’s latest farm bill strategy: Threaten to double the price of milk (via The Hill)

  1. We have heard about this for years, but I have never been explained the logistics of how it would happen. If the government pays $39/hundrdwgt, wouldn’t farmers produce a lot, a lot of milk. Does the gov then buy all the milk, because if they don’t the market will have a lot of milk. So I assume this in not the parallel of the CCP of corn when the USDA paid farmers a certain amount per bushel, so farmers produced a lot and then the market picked it up for $1.50/bu.

    I would appreciate an education on the best guess scenario. thx

    Like

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