The News Courier in Athens, Alabama

State and Nation

December 31, 2012

Deal reached for stopping spike in milk prices

— WASHINGTON (AP) — The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that could head off a possible doubling of milk prices next month.

Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., indicated the House could vote on the bill soon, though House leaders have not yet agreed to put the bill on the floor. In addition to the one-year extension that has the backing of the committees, the House GOP is also considering two other extension bills: a one-month extension and an even smaller bill that would merely extend dairy policy that expires Jan. 1.

Expiration of those dairy programs could mean higher prices at the grocery store within a few weeks. Agriculture Secretary Tom Vilsack said Americans face the prospect of paying $7 for a gallon of milk if the current dairy program lapsed and the government returned to a 1948 formula for calculating milk price supports.

A spokesman for House Speaker John Boehner said Sunday that Republican leaders had not decided how they would proceed on the farm extension, though a vote could come as soon as Monday. Boehner has pushed back on passage of a new five-year farm bill for months, saying there were not enough votes to bring it to the House floor after the House Agriculture Committee approved it in July. The Senate passed its version of a farm bill in June.

The prospect of higher milk prices has motivated some action. The bipartisan extension also includes disaster assistance to farmers affected by a lingering drought this year, along with extensions to other farm programs that expired in October.

Instead of just extending current dairy policy, the extension bill includes an overhaul of dairy programs that was included in both the Senate and House committee bills. The new dairy programs include a new, voluntary insurance program for dairy producers. Those who choose that new program also would have to participate in a market stabilization program that could dictate production cuts when oversupply drives down prices — an idea that hasn't gone over well with Boehner.

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