Farm Bill Expires
Dairy faces set backs
Wednesday, October 03, 2012 7:02 AM
It's official, the 2008 Farm Bill and its programs have expired. Congress failing to meet the Sept. 30 deadline to pass a new, or even extend the 2008 Farm Bill, impacts a critical number of programs according to U.S. Agriculture Secretary Tom Vilsack. Affected are programs for farm commodity and price support, conservation, research, nutrition, food safety, and agricultural trade.
With no Farm Bill passage the dairy industry faces program losses and consumers will likely see milk price increases.
Speaking to media Oct. 1, Vilsack said, " As of today, USDA's authority or funding to deliver many of these programs has expired, leaving USDA with far fewer tools to help strengthen American agriculture and grow a rural economy that supports 1 in 12 American jobs. Authority and funding for additional programs is set to expire in the coming months. Without action by the House of Representatives on a multi-year Food, Farm and Jobs bill, rural communities are today being asked to shoulder additional burdens and additional uncertainty in a tough time. As we continue to urge Congress to give USDA more tools to grow the rural economy, USDA will work hard to keep producers and farm families informed regarding those programs which are no longer available to them."
The expiration of the Farm Bill has ag producers wondering what happens now. Does it all end? Not everything, as a vast amount is covered in the continuing resolution, which sets the USDA budget and will continue to operate - at least for a little while. All crops planted in 2012 are covered for crop insurance until March 2013. Food stamps and farm subsidies will also continue into the next year.
Dairy farmers could see immediate changes if a Farm Bil doesn't pass by the end of this year. Expiring on Dec. 31 is the Milk Income Loss Contract program, which compensates dairy farmers during times of low milk prices.
Without a Farm Bill, Federal price supports for dairy products would revert back to default 1949 levels which are higher than today.
Price supports by the USDA indirectly assures a minimum price for milk by purchasing any cheddar cheese, nonfat dry milk, and butter offered to it by dairy processors at stated prices. These purchase prices are set high enough to enable dairy processors to pay farmers at least the support price for the milk they use in manufacturing these products. If prices revert back to 1949 levels, consumers could likely end up paying twice the amount they currently are for their milk.
Numerous political analysts are speculating on when a farm bill might pass. "The best angle I've heard is that if Obama wins, a farm bill completed during the lame duck is more likely; if Romney wins, they'll extend and save changes for 2013," Gary Blumenthal, head of the agricultural consultancy World Perspectives, told the Reuters Global Ag Forum.
And while the impacts of a delayed Farm Bill are not seen as immediate, it does throw a wrench in farmers planning the coming year's finances.
"Right now the main issue is the uncertainty," American Farm Bureau Federation's Dale Moore told Reuters about the lack of a Farm Bill. "By not knowing what the new farm program is when they are sitting down with their bankers to get their credit while planning for next year-they don't know what they are going to be dealing with."