WASHINGTON — The five-year farm bill nearing completion in Congress would give dairy farmers a break when milk prices are low and feed prices are high.
People close to the debate on the farm bill say the House-Senate conference committee has agreed to a proposal by Sen. Patrick Leahy, D-Vt., to adjust the milk subsidies farmers are paid based upon the cost of corn, soybeans and alfalfa hay — three critical items on the menu for Northern New York dairy cows.
Some details were murky because lawmakers' offices are reluctant to share details before the bill is completed and announced publicly. But generally, Capitol Hill sources said, the measure would apply a new formula to the payments farmers receive through the Milk Income Loss Contract program, which is also preserved in the bill.
Negotiators appeared to draw closer to an overall deal Wednesday, saying they anticipate votes in the House and Senate next week. The White House, however, continues to raise objections.
The change in the dairy program is significant because it represents the first time dairy farmers' payments have been tied to feed costs, which have risen sharply during the past few years. Economists say high prices for corn, soybeans and other feed are likely to remain high for the long term, meaning the price guarantees dairy farmers receive from the federal government could remain well below the cost of producing milk.
A source working on the issue with lawmakers' offices said the conference committee also is poised to increase slightly the amount of milk eligible for the subsidy, from 2.4 million pounds a year to 2.98 million pounds. That is roughly the difference between what a 130-cow farm produces and what a 165-cow farm produces.
Farmers would be paid 45 percent of the difference between the price for beverage-class milk and a target price set by the government, currently $16.94 per 100 pounds.
New York lawmakers have made expansion of the MILC program a top priority, seeing that as the most politically possible way to help farmers. Milk prices have been historically high lately, though feed and energy costs eat into those returns.
The farm bill, which also covers nutrition programs such as school lunches and food stamps, expires May 16, following a series of extensions. The White House has raised the prospect of a veto, but lawmakers say they doubt the president would veto a bipartisan bill during an election year, especially if congressional leaders have the votes to override.
The feed price adjustment on the MILC program, as proposed, would weigh corn more heavily than other feeds — but not exclusively, as earlier proposed. That move would more accurately reflect the feed rations farmers typically give cows.
