Farm Bill Extension Keeps Dairy Policy Largely Unchanged

Dairy policy in the U.S. will stay much the same this year. Efforts to dramatically change it were put on hold when Congress passed a nine month extension of the Farm Bill earlier this week.

It will be the status quo more or less for the dairy industry in the coming months. Ag leaders in congress had spent months coming up with new ways to help farmers and processors minimize risk. But that work basically went out the window when lawmakers voted to extend the recently expired farm bill. For now, farmers will continue to get cash payments if milk prices drop below a certain amount, a practice reformers had hoped to get rid of in a new Farm Bill. UW Extension Dairy Economist Bob Cropp says its continuation is good for farmers and dairy processors, “It doesn’t come out of the processors back pocket, or consumers back packet, but the taxpayers’ pocket.”

With Washington in a budget cutting mood, cash payments may not have long to live however. UW-Madison Dairy economist Mark Stephenson says reformers in Congress may eventually get their way, “I think what they want to do is move producers towards having a little bit of skin in the game by thinking they’d pay premiums to have protection against bad market conditions.”

Some ag leaders in Congress are looking to replace cash payments with a voluntary insurance program. Wisconsin agriculture groups say their members are willing to be responsible for their own coverage and rely less on government.