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Capitol View®
Brett Neely

Milk price spike looms again as congressional fix expires

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WASHINGTON - Late last year, it seemed for a brief moment that milk prices could double because Congressional gridlock on the larger farm bill was about to let an obscure 1949 agriculture law take effect again. Since that legislative crisis was happening at the same time as the 'fiscal cliff' standoff, wags quickly dubbed the farm bill expiration the 'dairy cliff,' which was averted at the last minute by Congress.

Now we could be in for a sequel, which I'll dub the "Dairy Cliff: 2014 Edition."  That word is coming from 7th District Congressman Collin Peterson, a Democrat who's the ranking member on the House Agriculture Committee. And this time, Peterson hopes the threat of rising milk prices will be enough to force House Republican leaders to negotiate a farm bill amenable to both chambers of Congress.

The "dairy cliff" has its roots in Congress's failure to pass a farm bill in the past two years. The wide-ranging legislation has been tied up in intra-party debates among House Republicans, who want to see deep cuts to food stamp spending, one of the areas covered by the bill. The Senate passed a comprehensive farm bill in June but the House stripped food stamps from its legislation in July, a non-starter for Democrats.

The short-term dairy fix Congress passed last year expires on Sept. 30, and the current price support system for milk expires at midnight on New Year's Eve. Between the Syrian crisis, spending bills to keep the federal government open past Sept. 30 and the rapidly-looming debt ceiling, there's not a lot of legislative floor time left to also address the farm bill or the dairy programs.

Peterson told reporters that he called Agriculture Secretary Tom Vilsack on Tuesday and suggested that the Agriculture Department begin planning to implement the 1949 law, which many analysts estimated last year could double the wholesale price of milk. The 12-term lawmaker said House Minority Leader Nancy Pelosi also supports the plan.

The big dairy processors would see a major increase in the price of milk if the 1949 law takes effect. Peterson said the processors' trade organization, the International Dairy Foods Association, "would call [House Speaker John] Boehner," if USDA begins setting up the rules to implement the 1949 law to force some kind of negotiation.

"We're not getting anyplace with what we're doing," said Peterson.

Peterson has long had a contentious relationship with dairy processors and pushed an amendment that failed to pass to the House farm bill that benefited dairy farmers over the processors.