Harvest Public Media
8:17 am
Fri December 27, 2013

Farm Bill Set To Expire, But ‘Dairy Cliff’ Not Quite Imminent

No need to hoard milk and ice cream over New Year’s Day. Turns out, the “dairy cliff” isn’t as steep as we may have once thought.

For over a year, farm bill watchers have warned that the milk prices would balloon to $7-8 per gallon if the farm bill expires without a replacement – sending us over what has been termed the “dairy cliff.”

Now, we know the farm bill will expire Dec. 31 and there will be no new farm bill until Congress returns in the New Year. But it turns out, dairy prices won’t surge on Jan. 1 as some farm bill supporters have suggested.

Secretary of Agriculture Tom Vilsack has been warning of the “dairy cliff” for months. But now, he says that policy won’t be revived overnight.

“It would take some time,” Vilsack said. “Not an indefinite amount, but not a long period to get it implemented.”

So you’re safe from the diary cliff at least through January, as long as lawmakers continue to make progress on the farm bill. But if they fail, Vilsack insists the “dairy cliff” is real.

“I mean at some point in time when it becomes quite obvious that there is no agreement, then it is our responsibility under the law to institute those programs,” Vilsack said.

The “dairy cliff” would be the result of reverting federal policy to guidelines established by the 1949 federal farm policy package. It’s what’s known as “permanent law” – farm bills since then have merely superseded the 1949 policy that has been underneath all along.

In this case, permanent law would force the government to buy dairy products at inflated prices. At the time, it was meant to support farmers and give dairy farmers a price floor for their products. Now, it’s outdated policy that would result in a surge in the price of your ice cream.

House and Senate negotiators continue to work on hammering out a framework for a farm bill. And they plan to pass a final farm bill by mid-January.

Harvest Public Media’s Jeremy Bernfeld contributed to this report.

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