We talked a week ago about the farm bill that was stuck in Congress, and the spike in dairy prices Americans would see if the legislation failed to pass. The Senate approved its version over the summer, but House Republicans refused to take up the bill, and for a variety of complicated reasons, the result was likely to be an unstable market and milk prices at $8 a gallon.
The good news is, that's not going to happen, thanks to a nine-month farm bill extension that was included in the larger fiscal agreement approved by the House last night. The bad news is, the temporary fix is still a bit of a mess.
In the final hours, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) found herself pushed aside in favor of legislative language generated by the office of Minority Leader Mitch McConnell (R-Ky.), a bit player and frequent "no" vote when the Senate adopted a more comprehensive five-year farm bill last June.
McConnell's role in the tax talks gave him immense leverage, while Stabenow was hurt by committee infighting over her efforts to write a more comprehensive farm bill extension that included changes in the dairy program.
The upshot is a victory for Southern agricultural interests with the greatest stake in a costly system of direct cash payments to often already profitable producers. In the dairy arena, giant processors like Dean Foods Co. come out ahead while the outcome is a major blow for the National Milk Producers Federation, which watched with disbelief from the sidelines on New Year's Eve.
Farmers see the existing dairy support program as an out-of-date system in need of reform and a long-term fix, and many policymakers focused on agricultural policy hoped to see Congress approve a five-year plan.
None of that is happening, farming interests on Capitol Hill appear increasingly divided in their lobbying strategy, and the dairy industry is incensed.
Agriculture may not be the sexiest political issue on the landscape, but we can expect this to be a major point of contention in the new Congress.