October 3, 2024
On Sept. 25, the House and Senate approved a continuing resolution to fund the government through Dec. 20. The bill also included an additional $321 million in funding for the Secret Service. Having avoided a government shutdown before the Sept. 30 deadline, Congress has recessed, and members are returning to their districts before November’s election. The continuing resolution did not contain an extension to the farm bill, so the 2018 farm bill expired this week; however, most USDA operations will see little, if any, immediate impact. Crop programs all continue through sometime next year, depending on each crop’s marketing year. Big-ticket programs such as nutrition assistance, school meals and crop insurance will all continue.
Recent talks among the staff of the chairs and ranking members of the two Congressional agriculture committees have raised hopes that Congress might agree on a new farm bill during the post-election “lame duck” session. If not, another temporary extension of the current law would be likely. (The farm bill was originally set to expire in 2023, but Congress extended it by one year – an extension that has now expired.)
Without a farm bill or an extension, commodity support programs eventually revert to older, so-called “permanent” law, routinely suspended by each successive farm bill for the past several decades. This means that the first perceived deadline for either a new farm bill or an extension is December 31, 2024, when dairy price supports of at least 75% of “parity” would kick in. Parity is a series of indices that attempt to equate current prices to their inflation-adjusted levels from 1910-1914. For dairy, this would mean supporting the sector at $65.40 per hundredweight of milk, compared to actual recent prices of $23.60.
A return to parity milk pricing would be disruptive and puts pressure on Congress to do something before Dec. 31. In fact, it is not clear that USDA would immediately be forced to nearly triple milk prices since the department lacks current regulations to carry out such a program. However, the threat of such an occurrence has typically been sufficient for Congress to act in time to avoid going over what policy mavens call the “dairy cliff.”
Adding to this discussion is the devastation in the Southeast brought on by Hurricane Helene this past weekend. As producers have already dealt with low market prices and high input costs, there may be additional pressure to pass a new farm bill and/or provide supplemental support to impacted producers. These factors will likely play into what can be done in the lame-duck session.
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