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 $17 a hundredweight. If it wasn’t, “we’d be screaming everyday,” for a solution. “It’s disgraceful they can’t come to a decision.”
Bloomville dairy farmer Barbara Hanselman said “I don’t know what to think.” She did not think that parity was possible when the problems with passing a new farm bill began but “this Congress doesn’t seem to be able to accomplish much,” she said. Since the nutrition programs are involved in the legislation, the delay will affect more than just farmers, she said. She was glad the legislators that represent the area know what is at stake, she said.
Her farm and others in the area are represented by Dairylea Cooperative. Its spokeswoman, Karen Cartier, said there are substantial differences in the two conference committees, with the nutrition programs being the biggest hurdle. “The disruption to the system (if nothing is done) will force them to do something. I believe it will be short term.” Not only would failure to do so increase the price domestically, it would price dairy products out of the export market, which makes up 16 to 17 percent of domestic production, she said.
The Associated Text ColorSwatch/NoneStrokeStyle/$ID/SolidText ColorSwatch/NoneStrokeStyle/$ID/Solid$ID/NothingText ColorText Color$ID/NothingText ColorText ColorPress contributed to this story.