Andrew Novakovic, an expert on the Farm Bill and professor of agricultural economics at Cornell University, said Congress’ failure to produce a new long-term Farm Bill in its “fiscal cliff” compromise provides predictability to 2013, but not beyond.

"It also means that the equivalent of a $10 support price for Class III and IV milk remains in effect, which is to say no effect at all. The Milk Income Loss Contract (MILC) program that compensates dairy producers when prices fall below specific levels is extended by simply changing all the 2012 dates for MILC in the 2008 Farm Bill to 2013.

"This means that the more generous formula and larger production cap goes back into effect and extends through Aug. 30, 2013. This raises the possibility of retroactive payments to farmers.

"Because of some ambiguity in the bill's language, it is not entirely clear whether this would include milk produced in September 2012, which is important to farmers because it is the only retroactive month with a significant payment opportunity."

Novakovic also suggested that a 2013 Farm Bill could look quite different from the 2012 Farm Bill that emerged from the Senate and the House Ag Committee discussions.

"Educated guesses are that the 2013 conditions will be less favorable for agriculture and food programs," he said. PD

—From Ag Newswire