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From "Fiscal Cliff" To "Farm Cliff" Milk Could Shoot Toward $6 or $8 A Gallon After Jan.1

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There are farms and farmers in every state of the Union. While some such as Iowa are called “Farm States” agriculture is a nationwide industry and the federal government plays a huge role in providing the gyroscope that balances what otherwise are spikes and severe dips in agricultural products.

The “Fiscal Cliff” has been dominating the news cycle for the past few weeks, but there may be another cliff in our sights: the “Milk Cliff”.

 It stems back to the Congress not passing an agriculture bill.  The bill contains a formula where the Government will buy milk from dairy farmers if the price gets too low (roughly half of the national average of $3.65 per gallon).  

However, if something isn’t agreed upon by the end of the year, the Government would “be forced” to buy dairy products at double the current price which, they’re saying, would push the price up for everyone:

Retail milk prices, currently at $3.65 a gallon nationally, could shoot toward $6 or $8 a gallon after Jan. 1. Farmers say little information has come out of the House and Senate about farm bill proposals and time is running out for farmers and consumers.

Sen. Jeff Sessions (R-AL) explains about the recent U.S. Department of Agriculture agreement with the government of Mexico to “help educate eligible Mexican nationals living in the United States about available nutrition assistance,” which includes the US food stamp program.

Sen. Sessions explained that the funding for this program came from a “farm bill” in 2002, which allocated $800 billion over 10 years for the entire US food stamp program – meaning that 80 percent of this trillion dollar “farm bill” program is spent on food stamps, leaving only 20 percent to go to farmers. This is the problem.

Democrats are blaming Congress for not passing a farm bill that would prevent the otherwise automatic return to 1949 farm policy on the first day of 2013 and the much higher milk support prices that would go with it.

Congress is waiting to see what the proposals are from the House and Senate versions” of the farm bill.

Could our government is truly that dysfunctional?

That may be the case but in the Republican dominated House, members are not planning to vote for a new farm bill, while the Democrat controlled Senate has passed a new Food Farm and Jobs Act.

There are too many Republicans especially Tea Party Movement adherents who are opposed to big government and government spending and who won’t vote for a farm bill proposed by Democrats with 80% of the cost of the bill going to the food stamp program.

Congressman-elect Luke Messer, R-6th District, who will be sworn in Jan. 3, said it is hard to know whether the measure will pass by the end of the year or not.

Messer has said he supports elements of the Farm Bill, particularly the crop insurance program without which crop insurance would be unaffordable for most.

However, he is of the belief the Farm bill’s name is misleading. Nearly 80 percent of the $1 trillion the 2012 bill would spend over the next 10 years would go to the food stamp program which is totally unacceptable, he said.

So we’re kind of waiting to see what the proposals are from the House and Senate versions” of the farm bill.

If the Democrat controlled Senate does not cut spending on the food stamp program from the bill and congress cannot come to an agreement by January 1st, a policy from the 1940s requires the government to buy up milk at double the market price to balance out the milk market. This would end up costing consumers between $6.00-$8.00 per gallon.
 

It has been projected that if prices jump to that level people will buy 70% less dairy products. Which is going to have a very negative effect on jobs and a already week economy. This will also have a significant impact on all comodities as well. 

All Americans wil be directly affected with the increase in the price of all commodities if the Democrat Controlled Senate cannot cut the pork barrel spending for the food stamp program out of the new farm bill.

 

 

 

 

 

 

 

 

 

 

 



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