Saturday, December 29, 2012

Ready to Cry Over Spilled Milk? Welcome to the Dairy Cliff

Posted By on Sat, Dec 29, 2012 at 9:53 AM

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Considering that Idaho's dairy industry employs more than 22,700 individuals and that Idaho ranks third in the nation among milk-producing states, the Gem State has plenty to win or lose in the logjam that is the U.S. Congress.

In addition to the fiscal cliff, Congress is tangling over the so-called "dairy cliff," which could see the price of milk double if lawmakers don't pass a new farm bill by Jan. 1.

The bill contains something called the Dairy Product Price Support Program that helps guarantee a minimum price for milk, or the "support price."

If a new farm bill isn't approved, the minimum price for milk reverts to a price set more than 60 years ago in the Agricultural Act of 1949. That's when the parity price was $39.53 per 100 pounds of milk. Currently, farmers are getting about half of that - $19.50 per 100 pounds of milk.

Without a farm bill, there's also a strong chance that the U.S. government will find itself buying a lot of milk because the public's taste for high-priced dairy could readily sour as the higher prices trickle down to grocery stores.

"The reality is that there is a very serious risk that we might not get a farm bill done this year," Agriculture Secretary Tom Vilsack told USA Today. "The uncertainty of not knowing what the policies are going to be will create difficulties. We need a farm bill and we need it now."

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