Washington — The price of a gallon of milk could top $7 soon, and if that happens Congress would be to blame, the nation’s milk producers say.
The reason the price of milk and other dairy products could skyrocket is that the two federal programs that help regulate dairy prices expired Sept. 30 because Congress failed to reauthorize a five-year farm bill.
“We’re facing a ‘dairy cliff,’” said Chris Galen, spokesman for the National Milk Producers Federation.
The Senate did approve a new farm bill, on a bipartisan basis, earlier this year.
That bill would scrap the old dairy programs in favor of a new one that would provide farmers a subsidy when prices are low and cost of production — including feed, fuel, labor and shipping — is high.
The bill would also allow dairy farmers to increase their financial protection by buying new federally subsidized insurance coverage that would pay out when profit margins dip. Connecticut’s $1 billion a year dairy industry backed the bill.
But the House failed to approve its version of a farm bill because conservative Republicans said it did not cut enough money from farm subsidies and food stamps; and liberal lawmakers, including Rep. Rosa DeLauro, D-3rd District, said it would cut too much from the food stamp program.
So Congress recessed last month without reauthorizing billions of dollars in federal farm programs. Lawmakers may return to Washington after the Nov. 6 election for a “lame duck” session, but nothing has been scheduled.
“Without government help, the price of milk explodes,” said Rep. Joe Courtney, D-2nd District, a member of the House Agriculture Committee.
That explosion isn’t likely to come until after New Year’s Day, when a 1949 law would allow dairy farmers to account for the cost of production in the price of milk.
According to the National Milk Producers Federation, the farm price of milk would rise to about $3.44 per gallon. If the current 100 percent retail markup holds, the price of that gallon of milk at the supermarket could rise to almost $8. That’s almost double the current price and high enough to affect consumption.
“We’ve never been in this position before, so we don’t know what will happen,” said Galen of the National Milk Producers Federation.
There are about 150 wholesale dairies — located on a total of about 70,000 acres — in Connecticut.
Predictions of a “dairy cliff” may be motivated in part to pressure lawmakers to approve a final farm bill in a lame duck session.
Courtney hopes farmers and consumers will persuade lawmakers to act.
“The external pressures will be nuclear,” Courtney said.
House Speaker John Boehner has indicated there may be a vote on a farm bill in the lame duck session of Congress. But he did not say whether it would be a one-year extension of the current farm bill or a new, multi-year authorization that includes the new dairy program.
Courtney said Boehner “didn’t even try” to muster enough votes for a farm bill in the regular session.
A vote on a farm bill will add to an already busy agenda that’s expected in a post-election session. The lame duck Congress will likely work on a deal on a series of expiring tax cuts and a bill to offset a scheduled $110 billion in cuts that would disproportionately affect the defense budget.