Are you ready to pay 8 bucks for a gallon of milk? Over and above any tax hikes you get to embrace once we all pitch over the fiscal cliff?
Lost in the political standoff between the Obama administration and Congressional Republicans over the budget is a virtually forgotten impasse over a farm bill that covers billions of dollars in agriculture programs. Without last-minute Congressional action, the government would have to follow an antiquated 1949 farm law that would force Washington to buy milk at wildly inflated prices, creating higher prices in the dairy case. Milk now costs an average of $3.65 a gallon.
Higher prices would be based on what dairy farm production costs were in 1949, when milk production was almost all done by hand. Because of adjustments for inflation and other technical formulas, the government would be forced by law to buy milk at roughly twice the current market prices to maintain a stable milk market.
Among the fun effects this could have, while in the short term consumers pay double for dairy products, it could drive US dairy companies into buying their milk from overseas. That would kill dairy jobs here in the United States. By law, though, the US government would go on buying the milk at inflated prices, costing taxpayers more money. What a super terrific impact all of this would have on the struggling economy.
The farm bill itself, meanwhile, is packed with porkbarrel spending, as farm bills always are. So it’s not like the bill ought to have an obvious path to passage. Typical of a farm bill, it’s a bad bill overall and spends money that we simply do not have.
It’s fair to wonder whether there are two functioning brain cells to rub together in Washington anymore.
Well, milk would be over $8 per gallon, but we’d have even more FREE government cheese!
What isn’t to like?
looks like status quo in Washington
I don’t believe it. Not for one minute. Frankly, milk prices might momentarily sky rocket but when people stop buying milk and milk products, the prices will fall like stones from the sky.
What ever we have to endure to stop The Farm Bill, Ag subsidies and food price supports, let’s roll, as Todd Beamer said.
If the government is involved, prices would not fall even if people stopped buying. government would either buy more at the inflated price to keep farmers afloat or farmers would go out of business.
It is an unfortunately truth today that farming is very hard to do without some kind of government subsidy. The costs of fuel and fertilizer are up but the commodity prices have not kept pace. That means less of an already thin profit margin. I know farmers and loggers who have gone out of business because of this. The drought hasn’t helped any either.
That said, I wouldn’t mind seeing less pork going to big agra because they can afford the increases. Smaller farmers should still get help because, let’s face it, big agra is sucking the Ogalala Aquifer dry and it could well be unproductive in a decade or so. If that happens, it will be back to smaller farms throughout the East.
“What ever we have to endure to stop The Farm Bill, Ag subsidies and food price supports, let’s roll, as Todd Beamer said.”
Preface: Of farming and farming families in America since 1856.
I agree! Its way late in coming that ‘farmers’ should be able to produce and market their commodities in the true spirt of free enterprise. Status quo finds manipulated commodities marketing and processors takeing claim to the overwhelmeing profits from government agri subsidies leaving the producer with only crumbs.
If successful in ridding agri subsidies some producers will be hurt in the interim transition but in the longer term they will win back their control of profits. There always has to be a big loser in such transitions and in this instance, if actually implemented, will be no different. The big loser? The end-user market of commodities such as in dairy!
For those representing themselves in the “YEA” column and think that the “milk market” is only those ‘jugs’ you grab at Wallyworld or the cheese you grab on that aisle well — you’re wrong! Get ready for some real pricing rather than government fixing pricing at the producer level. Farmers have learned well how to regulate and manipulate the markets and pricing but have been held captive by the government and big lobbyists of the food processor industries from doing so. Most agri food producers are or have the ability to be very diversified. We know how to manipulate say the markets utilizing grains — we can make the cost to the end user say for a loaf of bread, worth more than your retirement accounts –if you can find a loaf of bread on the shelf anywhere. Now apply that concept on down the long food chain list!
YEP! I’m one of those in the “YEA” column! Well time for spoiled americans to learn some good hard life lessons!