House Today to Consider Temporary Dairy Program Extension

January 1, 2013 02:30 AM
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Action comes despite Senate dealing with dairy and other farm bill issues in fiscal cliff measure

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Despite the Senate early Tuesday including a partial extension of the 2008 Farm Bill that kept current dairy policy in place, the House today will consider a different approach under suspension of the rules; 40 minutes of debate; not subject to amendment; two-thirds majority vote required for passage. The measure will be managed by House Ag Chairman Frank Lucas (R-Okla.), or his designee. The Democratic manager will be Rep. Collin Peterson (D-Minn.), or his designee.

Current federal dairy policy is based on five major programs — the Dairy Product Price Support Program (DPPSP), the Milk Income Loss Contract (MILC) Program, Federal Milk Marketing Orders, Dairy Import Tariff Rate Quotas, and the Dairy Export Incentive Program — which together are designed to provide price and income support and market stability for dairy producers.

These programs, along with the most recent farm law, expired Dec. 31, and farm policy has since reverted to a permanent 1949 law that requires USDA to begin buying dairy products at a rate of $38.54 per hundredweight (cwt) — more than double the current price. This is expected to eventually lead to significantly increased consumer prices for milk and dairy products.

Both the House farm bill and the Senate-passed farm bill (S 3240) proposed similar changes to dairy policy, including the termination of the DPPSP, MILC, the Dairy Export Incentive Program, and Federal Milk Marketing Orders. Under the bills, those programs would be replaced by a new dairy program with two main components: margin protection and market stabilization to manage milk supply.

The pending House bill (unnumbered) suspends the application of permanent farm law price support authority for milk for one month, and extends the operation of certain just-expired dairy programs. Specifically, the measure suspends milk price support authority under the permanent 1949 law through Jan. 31, 2013, and also extends through that time period the following three dairy programs: Dairy Product Price Support Program; Dairy Export Incentive Program; and Milk Income Loss Contract Program. Under the measure, the bill's authority would be considered to be effective as of Dec. 31, just prior to when dairy policy reverted to 1949 permanent law. The Congressional Budget Office has not released a cost estimate for the bill.

Comments: The bill is likely a backup measure should the Senate-passed fiscal cliff package fail in the House.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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