Eatonton, Ga. -- If congress keeps putting off the passage of a new farm bill or the extension of the old one, an antiquated price system could be triggered that would double the price of milk. Developed in the late 1940s, the pricing scheme would set milk prices based partly on inflation. Prices would only revert back to that outdated formula if the current stalemate isn't addressed.
The farm bill discussion has been held up by the continuing talks over the fiscal cliff. Dairy farmer Heck Davis in Eatonton, Georgia isn't sweating any possible increase in milk prices. For one thing, he thinks they would help smaller farmers in the short run. For another, he thinks Congress is just stalling.
"Any group of fifth graders could balance the budget and run Washington in my opinion-well maybe 7th or 8th graders," Davis said. "They don't pass anything until they have to. It's all about whose face is going to get rubbed in the mud."
Congress is working up until the 31st to try to reach a deal on the fiscal cliff. Even if they don't address the farm bill with those discussions, dairy industry lobbyists say there is still hope for stable milk prices.
"When [Agriculture] Secretary Vilsack looks at this and realizes he's about to implement a law that would effectively significantly increases dairy prices on millions of consumers, and I would note that it would really cause damage to the dairy industry overall, I think he's going to be very reluctant to implement that law," said Jerry Slominski, a lobbyist for the International Dairy Foods Association.
Slominski said it's within the Secretary's power to come up with a temporary fix that would stop any immediate price increase.