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Farm bill worries push anxiety over dairy prices

Posted December 27, 2012

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— Larry Charnign comes to the country store at Maple View Farm in Hillsborough about twice a month.

“It’s the freshest milk and eggs and cheese that you can get,” he said.

But the money he spends on dairy products could soon cost him more if Congress doesn’t take action on the so-called farm bill, a piece of legislation that has become an obscure tangent in the political standoff of the “fiscal cliff.”

The farm bill expired in September after Congress didn't complete action this year to resolve it. Agriculture industry leaders hope the farm legislation can be added to any final fiscal package before the end of the year. But if no fiscal agreement is reached, farmers could face the prospect of returning to an antiquated system for pricing milk that would bring big price increases for consumers.

The Agricultural Act of 1949 contains the basic provisions for setting milk prices. The act is superseded every time a new farm bill is passed, but if no new bill or extension is passed, the old act goes back into effect.

That law includes a mechanism for guaranteeing a minimum milk price that covers producers' costs. The government guarantees to buy their milk products at that price, but producers can usually do better selling on the consumer market. But if the old mechanism were applied to current market conditions, the government price could be double the current rate, industry officials say.

Farmers would sell their dairy products to the government instead of the private market and store prices would surge. Then prices might collapse as the government eventually sold its dairy stockpiles.

Maple View Farms milk Rising dairy prices could cream consumers

Larry Wooten, president of the North Carolina Farm Bureau, said farmers have been pressing Congress about the issue for more than two years.

“It’s unfortunate that we’ve gotten to this point,” he said. “It’s provided a tremendous amount of uncertainty for our farmers as they go to their lenders to secure credit lines and loans for next year, and so uncertainty is the big word as we talk about this farm bill.”

Wooten said he thinks the current farm bill will be extended through early January, and the next Congress will begin work on a new bill.

“There’s all this hype that milk prices are going to double, that we’re going to go back to the 1947 or 1949 farm bill. That’s not going to happen,” he said. “We’ve been here before many times on previous farm bills, and you know there will be some extension of the current farm bill, and we go on.”

Still, the uncertainty doesn’t sit well with farmers – or consumers.

“With us not having the farm bill in effect, they’ll have no guarantee on their price, basically,” Maple View Farm co-owner Mike Strowd said.

Said Charngin: “You have to have your dairy.”

45 Comments

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  • Terkel Dec 28, 7:39 p.m.

    "And because of this, GOP governors who didn't like a larger federal government have turned over their health exchanges to the federal government. My taxes will go up despite their call for lower taxes." Lone Voice

    No, that tax you must blame on Obama. The majority apparently did not want 0bamacare and one option offered them was to have the Feds handle the exchange. 0's admin naturally was unprepared for this, and now they're scrambling. Watch this balloon in cost just like our lil ol Medicaid billing system at DHHS and for the same reasons: ineptitude giving way to crony "consultants".

  • GravyPig Dec 28, 5:42 p.m.

    "Your numbers are wrong, as has been pointed out by a previous poster. But you mention starving children. But according to liberals we have an epidemic of child obesity. So which is it? Are they starving or are they too fat? You can't have it both ways."

    You don't know which it is? How are you so sure that we can not have it both ways if you don't know?

    I would wager that the kids on welfare aren't obese, and the kids who aren't on welfare aren't starving. Yes he mentioned starving children, but did not say we have an epidemic of starving children. Wrong figures aside, why is this so hard to understand? Can you not have children starving while others are getting fat?

  • WhatWereOnceVicesAreNowHabits Dec 28, 4:06 p.m.

    RE : Food Stamps are not about hunger, they are about income supplimentation.

    Supposed to be a helping hand not a way of life,,,

  • King of Ignorance Dec 28, 4:00 p.m.

    I'm usually a big proponent of a market-based economy. The main exception being agriculture. I don't mind tax money going to support individual farmers (not big Ag companies).

    The food supply is just too important to national security to not have some government involvement.

    The stand off over this bill sounds kinda dumb to me. If Congress can't get together on something this simple, we're in a lot of trouble.

  • aetius476 Dec 28, 3:33 p.m.

    Did you know that you can now own 2 cars and still be eligible for Food Stamps?

    Also, you only need to qualify annually. So, if you happen to win the lottery, or get a high paying job one month after qualifying, you can collect for 11 months, regardless of your income or assets.

    Since the money comes from DC, it is in the states' and local interest to promote and get as many people on Food Stamps as possible. The diligence of checking eligibility is less than thorough. More signed up, the more federal money flows into the area.

    After all its Free! Picked fresh off Obama's money tree on the south lawn...

    The whole thing is just a huge scam, and way of wasting the taxpayers' money in the name of false compassion....

  • aetius476 Dec 28, 3:17 p.m.

    Dairy subsidies are the least of the issues with the "Farm Bill". 80% of the expenditures in the bill are for Food Stamps. Food Stamps are no longer an AG program, but is now a type of welfare. They are an income supplimentation program. It is part of the transfer of wealth scheme.

    Food Stamps have expanded to now cover over 45 million people (about a 30% increase during Obama's tenure). The new farm bill would expand the program further, increase benefits, and loosen eligibility requirements.

    Food Stamps are not about hunger, they are about income supplimentation.

    Instead of spending income to buy food, recipients can spend income on rent, car payments, cell phone, cable, booze, cigs, lottery, etc. Its simply a form of welfare....

  • Terkel Dec 28, 3:13 p.m.

    Oh, I see now how it works. A few people don't feel like paying for it but the govt decided they need it. They force other people to pay so the few can keep spending on wants, not needs. Just like 0bamacare.

  • exador7 Dec 28, 2:34 p.m.

    Yep,, It comes down to the high heads are just too far away from reality of the real world life.. They need four year terms with out re election.. And I will decide who gets a raise,, WAKE UP PEOPLE !!!

  • Terkel Dec 28, 2:00 p.m.

    What I don't understand is how people see this as anything other than corporate welfare. Let the prices rise and let the milk spoil on the shelves.

    They could also just take this 'phony crisis' law off the books, but then they'd get no subsidies.

  • cfuller1971 Dec 28, 1:27 p.m.

    The accusation that GOPers are cultists is laughable. All who worship at the altar of government, are cultists. This includes Republicans and Democrats and Independents.

    The problem here IS government. These policies, shrewdly disguised as helpful to the farmer, are nothing but ploys to get those ignorant of economics to vote for those who vote for this largesse. The fact is all this does is distort prices. By not renewing the provisions in the farm bill, they are simply trading one market distortion for a more nefarious market distortion.

    Where does the government get this money to purchase milk to "prevent prices from falling below certain levels"? It first has to tax or borrow (another form of tax). So, most of us are having money extracted from us at multiple points just to enjoy milk. This is immoral at its most basic level. What's wrong with something being more affordable for the people who can least afford it? This is not a legitimate function of government.

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