While I wasn't sure it would happen, the term milk cliff is back in our vocabulary. The reason? The House made it official by approving a one month extension of the 2008 farm bill. Now that in itself didn't get us back on that milk cliff however, the Senate has made it clear they will not approve an extension so this political chess match has put us right back where we were in December of 2012, talking about reverting back to permanent law that would cause a spike in milk prices. What does that mean when it comes to consumer prices? Well, we are already hearing the cry of $7-$8 dollar a gallon milk to start of the new year. However, that is highly unlikely. Mary Kay Thatcher is the chief lobbyist for the American Farm Bureau Federation and even though she does feel milk prices will rise, she does not feel it will go up to the levels we are hearing in some media stories. Thatcher explains her reasoning and how the implementing of permanent law works.
Now it is hoped that the political impact of a possible milk price hike will act as a hammer as Thatcher says to get Congress to keep working on the a new farm bill and possibly get something done by mid January. Dale Moore is the Executive Director of the Farm Bureau and he says their are some encouraging signs for the future of the farm bill. First, even though the House begins its holiday recess on Friday, both Ranking Member Collin Peterson and House Ag Committee Chair Frank Lucas have announced they are staying in Washington to see if they can hammer out a farm bill deal. Also, progress has been reported among farm bill conferees on farm payment formulas and possible food stamp savings. Moore says he feels good about the prospects of a bill coming out of committee by mid-January. One can hope that he is right and this long drawn out debate over a new farm bill can finally be resolved