In the weeks leading up to the end of 2012, the cost of a gallon of milk took center stage inside and outside of Washington, D.C. Major media outlets reported that the cost of a gallon of milk could soar upward to anywhere from $6 to $8 a gallon after Jan. 1. New York dairyman Skip Hardie was on camera for an NBC “Today Show” segment hypothetically asking a question that would have been on many dairy farmers’ minds: “What am I going to do with all this milk if people stop buying it?” Click here to read about how Hardie prepared for his TV interview.
The situation quickly earned the moniker – ‘the dairy cliff’ – as reported in several news outlets.
Chicago dairy market insider and publisher of the Daily Dairy Report Mary Ledman predicted that media outlets were overexaggerating how quickly milk prices would rise if we did go over the ‘dairy cliff.’ She spelled out why milk prices wouldn’t double in January as predicted. Click here to download a PDF of this report.
“Our analysts agree that the dairy sector is a pawn in a political game, with players pointing to looming rising milk prices (whether practical or not) as a way to attract media and consumer attention.”
National Milk Producers Federation used the media attention to promote its Dairy Security Act (DSA) legislation as sponsored by Rep. Collin Peterson.
On Fox News before Christmas, NMPF spokesman Chris Galen called the industry’s two-year discussion and inclusion of the DSA proposal in the farm bill “a low-hanging ornament on the Congressional Christmas tree” as it pertained to budget cuts.
Peterson was on-record throughout the last minutes of the dairy cliff discussion saying he would support nothing short of reform for dairy.
Reports indicated that the mass media attention had Pres. Obama pushing for Congress to act. U.S. Secretary of Agriculture Tom Vilsack was on CNN’s “State of the Union” reiterating that if no action were taken the government would be forced to “strongly support” the dairy market by buying dairy products after Jan. 1. He also said the voice of rural America needs to be amplified.
“If you like anything made with milk, you're going to be impacted by the fact that there's no farm bill,” he said. “Consumers are going to be a bit shocked when instead of seeing $3.60 a gallon for milk, they see $7 a gallon for milk. And that's going to ripple throughout all of the commodities if this thing goes on for an extended period of time.”
The House of Representatives actually posed three potential solutions to the looming crisis. Like the fiscal cliff, they settled on kicking the can down the road for several months.
By extending current dairy policy, they delay the worst impact of the farm bill cliff – rising milk prices. Click here to read what could have happened if Congress let dairy policy lapse for more than a just a day or two.
Most agree that while it would have been nice to receive a bigger milk check – even if it wasn’t the $30-plus per hundredweight that was predicted – but that linking milk prices to an outdated 1949 farm law was not in the industry’s best interest.
Ledman perhaps best summed up what going over the dairy cliff would have been like: “While some may toast to $39 milk, the party is likely to be short and the hangover long.” PD
Walt Cooley
Editor
Progressive Dairyman magazine
