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Farmers warn of high milk prices without farm bill

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Associated Press
June 29, 2013

MILWAUKEE (AP) ó Dairy farmers expressed frustration this week with Congressí failure to pass a farm bill, saying the uncertainty made it hard to do business and some could go under without changes to the federal milk program.

Farmers also worried that if a current nine-month extension of the 2008 farm bill expires with no action, a 64-year-old law will kick in, sending milk prices spiraling. While that might provide short-term profits, they say, itíd hurt them in the long run because no one wants to buy milk at $6 a gallon.

The U.S. House voted down a farm bill June 20, about a week after the Senate approved a different version. It was the second year in a row that the House failed to pass the every-five-years bill that sets funding for agriculture and food programs. Last year, it didnít even vote, prompting the passage in January of a slimmed-down extension of the 2008 law ó largely to avoid milk prices sharply increasing.

The Agricultural Act of 1949 sets a much higher price for government purchases of cheese, butter and other dairy products than the U.S. has seen in decades. The government cut the price in recent decades because if it didnít, more companies would sell to the government than to retailers, unless consumer prices rose to match.

Farmers fear if the higher prices kick in on Jan. 1, milk and other dairy prices will rise until consumers just stop buying their products.



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