Auld Could Get Older

12/29/2012 7:00 AM
By Dennis Larison Editor

It’s ironic to think how inappropriate that common image of the new year — out with old, in with the new — is this year.

With the fiscal cliff looming and the Farm Bill stalled, it looks as if we’ll be stuck with Father Time for a while yet before we can welcome the babe of a fresh new year.

According to the High Plains Journal, Barry Flinchbaugh, professor emeritus of agricultural economics at Kansas State University, told the American Bankers Association recently that he thought it would be at least April before a new Farm Bill passes Congress.

Politicians, though, are a lot like the weather. Just when you think you’ve got a crop you’ll be able to take to the bank, along comes a storm to flatten it. And conversely, about the time you’ve written everything off to drought, a soaking rain comes to the rescue.

It’s not beyond the realm of possibility that politicians will yet pull back from the brink of the fiscal cliff with a new Farm Bill thrown into the mix of compromise.

But don’t count on it.

An editorial Sunday in The Washington Post titled “The Milk Cliff” shows how unsympathetic urbanites can be when it comes to farm policy.

The Post points out that “like other commodity programs, dairy supports are so complex that even many farmers can’t comprehend them without accountants and lawyers.”

Although admitting that the consumer price of milk could double in the new year should the country revert to the 1949 dairy price support law in the absence of a new Farm Bill, the Post is still dismissive of the need for such farm programs, ascribing the true cause of the “milk cliff” to “Congress’ endless attempts to manipulate markets in favor of the various farm lobbies.”

It would seem that the newspaper’s editorial board is unaware of how many dairy farmers have been caught in the squeeze between low milk prices and high feed costs over the past few years, which has already pushed many of them over their own cliffs.

But many Farm Bill supporters aren’t talking about the farmer’s cliff when making their pleas for passage of a new Farm Bill. They’re talking about the sudden price jump for consumers.

Reuters quotes Sen. Debbie Stabenow, chairwoman of the Senate Agriculture Committee, who circulated an email recently, saying, “Fiscal cliff tax increases would hit middle class families’ pocketbooks, but so would paying six or seven dollars for a gallon of milk.”

The Post was unfazed by such arguments, noting that “per capita consumption of fluid milk has fallen 30 percent since 1975 and is likely to continue declining because of an aging population (fewer young drinkers) and the shift in consumer preferences toward such substitutes as soy milk, juice and bottled water.”

That attitude doesn’t bode well for economically stressed dairy producers who could see the bottom fall out of their market if demand for milk drops precipitously in response to higher prices, pulling them over the cliff too.

The politically influential Post appears blind to such disasters for dairy producers. Its conclusion is “that dairy policy increasingly amounts to using public resources to protect producers of a decreasingly popular commodity.

“Going over the milk cliff’ would harm many consumers,” the newspaper concluded, “but the pain might be worth it if it finally shocks the country into demanding an end to Congress’ fiddling with the milk market.”

Fortunately for farmers, that attitude doesn’t prevail in other parts of the country.

In Minnesota, for instance, The Minneapolis Star Tribune Online posted a question and answer session with Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee, defending the Farm Bill’s safety nets.

According to FarmPolicy.com, Peterson told the Star Tribune that “as long as (farmers) have crop insurance, they’re going to survive.”

Peterson explained that he was “talking about the guy who has 1,500 acres to 2,000 acres. A lot of times that’s a kid who just started five years ago. The only reason he’s farming is because he’s got crop insurance and he’s got these other safety nets he can take to the bank. And the bank can see, well, if the crop fails or the prices collapse, this guy’s going to have enough to pay back his operating loan.”

Take away those Farm Bill safety nets “and the only people who will be able to farm are people with deep pockets,” Peterson said. “And you will consolidate agriculture like nothing you have ever seen. And that’s not a good thing.”

Talk about cliffs — what The Washington Post doesn’t seem to understand is there’s a lot more at stake than a sudden jump in the price of milk or pulling the rug out from under a few marginal farms.

Let’s just hope that the politicians, like the weather, end up surprising us short of this brink.


Will the new Dairy Margin Protection Program eventually pay off for farmers?

  • Yes
  • No
  • Unsure

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