Partisan differences in Washington could push milk prices to nearly $7 a gallon, several people familiar with the situation said. Local farmers said Tuesday they were uncertain about what to expect.
Legislators are set to resume session after Thanksgiving to try and resolve their differences in a new farm bill, state Farm Bureau spokesman Steve Ammerman said.
The House has passed legislation that would cut $4 billion from the Supplemental Nutrition Assistance Program, while the Senate proposal cuts about a tenth of that amount. The current legislative session is scheduled to end Dec. 13. If an agreement is not reached by then, the possibility of higher milk prices becomes more likely, Ammerman said.
Without a new farm bill, which sets national agricultural policy including milk pricing and nutritional programs, the Department of Agriculture could return milk pricing to a formula from the 1940s (parity) that could cause retail prices to double. Currently, the national average is about $3.50 a gallon.
While the trigger is not automatic, the probability increases after Jan. 1 and that is very worrying to farmers, Ammerman said.
“It would pull the rug out from under them by drastically disrupting the market,” he said. It could flood the market with cheaper imports and affect this country’s exports, he said.
Middlefield dairy farmer Becky Sears said while the increase is possible, legislators she’s speaking with say “it won’t get to that.”
“If they don’t do something to protect the family farmer, they won’t have to worry about it because there won’t be anymore,” she said. “I am very discouraged by the whole process.”
The price farmers are receiving for they milk is about $22 for a hundred pounds, she said. This was well above the floor set for milk subsidies under the recent legislation, which was about $17 a hundredweight. If it wasn’t, “we’d be screaming everyday,” for a solution. “It’s disgraceful they can’t come to a decision.”