November 25, 2013

No Deal Yet on Farm Bill Conference


Leaders of the House and Senate Agriculture Committee met multiple times during the week of November 18th in an attempt to resolve their differences on the Farm Bill.  Despite numerous meetings, no deal has been reached on some of the key farm safety net policies and reforms to nutrition programs.  While major issues on farm and nutrition programs remain outstanding, Congressional staff are making progress on many of the other Farm Bill titles including Research.

With no deal in place ahead of Thanksgiving, negotiators will only have a small window of time after the Thanksgiving break to get a conference report completed.  House leaders have indicated that December 13th is the date when the House will adjourn for the remainder of the year, setting up a hard deadline for the Farm Bill to be completed in calendar year 2013.

Without a deal by December 13th, pressure will mount for Congress to pass a short term extension to avert what some call the “dairy cliff”.  If an extension is not adopted, the suspension of permanent law expires and the 1938 & 1949 permanent law (Agriculture Adjustment Act) would resume.  One of the more immediate impacts will be on dairy prices, as USDA would be required to alter the support price for milk in accordance with permanent law. Earlier this year USDA cited some of the potential impacts of reverting back to permanent law. For example, USDA estimated the minimum support level for milk (under 75% of parity in permanent law) would be $38.55/cwt., doubling the August 2013 market price for milk of $19.30/cwt.  Such policy change would have a significant impact on milk prices, something that members of Congress will want to avoid.