Look out! Here comes the ‘dairy cliff’ and the ‘retail cliff’ - eek!

[tangent4ronpaul]

http://tv.msnbc.com/2012/12/28/look-...-retail-cliff/

[video @ link]

Overlooked in the fiscal cliff debate is the looming “dairy cliff.” CNBC’s Seema Mody reports that Congress has until Jan. 1 to renew the Farm Bill. If it doesn’t, the price of milk and dairy products could rise sharply.

A gallon of milk now costs an average of $3.65. But that price could soar to $6 or even $8 a gallon without a new farm bill. The reason? One part of the Farm Bill controls the dairy market. Without it, pricing would go back to an outdated law put in place during the Truman era. The government would be required to buy dairy products based on 1949 production costs, when milking was done by hand. That would double today’s price. Farmers would lose incentive to sell directly to producers and prices in the grocery store would skyrocket.

Unlike the fiscal cliff and dairy cliff, the “retail cliff” isn’t the result of a dysfunctional Congress. More than 14,000 East Coast and Gulf Coast dockworkers are threatening to go on strike Sunday. That could cost the economy billions of dollars. Goods such as flat screen televisions, sneakers and clothing would sit idle at ports, or get rerouted–a costly proposition for retailers who would likely pass the cost on to consumers. The 15 ports involved in the labor dispute move more than 100 million tons of goods each year, or about 40% of the nation’s containerized cargo traffic.

The White House is urging dockworkers and port operators to continue negotiations and get a deal done to avert a strike. “Federal mediators are assisting with the negotiations, and we continue to monitor the situation closely” White House spokesman Matt Lehrich said.

=======
Price of milk could skyrocket in the New Year
http://www.necn.com/12/28/12/Price-o...5&feedID=11126

[video @ link]

While much of the attention these days is on the so-called fiscal cliff, there is another pressing issue that Congress needs to resolve before the end of the year.

This one deals with the federal farm bill.

Without legislative action, we could see higher milk prices, leading to "utter chaos" for many families.

Dive into any family fridge and you'd find pretty much the same products packed into that of Dave Drennan.

“Well, we got some specialty cheeses here we got as a gift for Christmas.”

But unlike you or me, he pays more attention to certain items as the executive director of the Missouri Dairy Association.

“It's uncharted waters for us. We have no idea what's gonna happen.”

While nothing's set in stone, early predictions for milk prices are sour.

In the New Year, they could double.

Right now, an average gallon of milk costs $3.60, so pretty soon it could be up to eight dollars a pop.

“If dairy prices rise too fast to a higher level that folks can't afford, there are so many alternatives in the market place, from the power drinks, the nutrition drinks, the sodas, the waters and all that that competition people will switch.”

And financial analyst Juli Niemann doesn't see that happening but rather envisions the dairy bill drying up families' disposable incomes.

“When you're only paying a certain percentage of your income in food and that percentage starts rising, then you have less money to spend on toys, games, prizes, clothing, furniture, in other words discretionary items.”

And all of those fears have a foundation on Capitol Hill, where tied up in talks about the fiscal cliff is also the farm bill, which includes the Dairy Security Act.

Without a decision by year-end, U.S. farm policy would revert back to the agriculture act of 1949, which makes milk go up based on inflation causing that swell in the supermarket.

========
‘Milk Cliff’ Could Be Best Thing That Ever Happened To Your Health
http://www.blisstree.com/2012/12/28/...m-bill-health/

As the fiscal cliff looms in our not-so-distant future, there’s another cliff some people are very concerned about: the milk cliff. The dairy industry is claiming if Congress doesn’t approve a new farm bill by January 1, milk prices could double and send us into a so-called “milk cliff.” Actually though, this could be the best thing that ever happened to our health.

Currently the average gallon of milk costs $3.65, but the dairy industry is warning us if the farm bill is not approved, it could send the price of milk to $6-$8 a gallon, as The Economist explains:

If there is no farm bill by the start of the next agricultural year, the government’s price-support scheme will automatically revert to what it was in 1949. Most crops have until the spring or summer, but the deadline for milk and other dairy products comes at the end of December. Applying the old formulas today would require the federal government to buy up enough milk to establish a minimum wholesale price more than double its current level, and, later on, enough wheat to raise its price by 67%.

But would that really be such a bad thing? Not necessarily, if you look at the fact that dairy is so harmful to our health, according to some.

The China Study’s author T. Colin Campbell, PhD. says cow’s milk is just plain bad for your body. It’s been linked to autoimmune diseases, Type 1 diabetes and even cancer. In fact, in several peer-reviewed animal studies, researchers discovered that they could actually turn the growth of cancer cells on and off by raising and lowering doses of casein, the main protein found in cow’s milk. In addition, it’s likely not a coincidence that cow’s milk is the number one cause of allergies among infants and children, and a whopping 33% of Americans are lactose intolerant, meaning our bodies can’t digest it properly because it’s not meant to be there in the first place.

On top of that, milk is jacked up with all sorts of hormones and antibiotics these days. Consider this: The average cow in 1970 produced 9,700 pounds of milk. Today, that number has nearly doubled to 19,000 pounds. How does that happen? With growth steroids. Things that eventually end up in our bodies and wreak havoc on our health.

So would it be such a bad thing if milk prices soared and Americans were forced to cut back on their consumption? In looking at our health, definitely not.

========
How about just getting gvmt out of the picture? gvmt meddling to fix gvmt meddling...

-t

[phill4paul]

[tony m]

So if we remove the current farm bill government intervention, we then resort to the previous farm bill government intervention. Kind of like NASA, checked and rechecked.

Uncheck and lets see what the market price will set at.

I am transacting $6.50 / gal for raw from a co op.

[tangent4ronpaul]

Agriculture Secretary Vilsack warns of higher milk prices
http://ktar.com/22/1598115/Agricultu...er-milk-prices

U.S. Agriculture Secretary Tom Vilsack is warning that you could soon be paying as much as $7 for a gallon of milk.

It's because an agriculture bill that provides government subsidies to farmers expired last summer.

Vilsack says that if a new farm bill isn't passed soon, Congress may have to revert to a 1949 law that forces the government to buy milk from farmers at twice today's average price of $3.65 a gallon. Vilsack says the government could then pass those costs along to you.

But United Dairymen of Arizona CEO Keith Murfield doesn't think that's going to happen.

"Even if the farm bill does not get signed, and the financial cliff happens, I don't see any changes in the milk price," Murfield said. "In fact, in January, we're going to see the milk price go down 20 cents a gallon from December."

That's because milk prices are tied to butter and cheese. "The butter powder market and the cheese market have dropped in the last month, which will affect the price of what we drink out of the bottle from the stores," said Murfield.

But Murfield says if congressional Republicans and President Obama don't come to an agreement to avert the "fiscal cliff," the earliest that we could see an impact on milk prices would be in March.

======
So the government would buy a ton of milk (at taxpayer expense) in order to create enough of a shortage to drive the price up, so in the end the taxpayer pays double for a gallon and pays for all wasted milk the gvmt buys...

why?

-t

[tangent4ronpaul]

So a better question is what's in the new farm bill?

Patriot Act III
or
Banning all guns in the US?

-t

[KingNothing]

So if we remove the current farm bill government intervention, we then resort to the previous farm bill government intervention. Kind of like NASA, checked and rechecked.

Uncheck and lets see what the market price will set at.

I am transacting $6.50 / gal for raw from a co op.

Didn't Mises or Hayek say that the history of government intervention is the attempt to correct previous acts of government intervention?

[KingNothing]

"Vilsack says that if a new farm bill isn't passed soon, Congress may have to revert to a 1949 law that forces the government to buy milk from farmers at twice today's average price of $3.65 a gallon. Vilsack says the government could then pass those costs along to you."


Why not just void that old law? Why not just have the president issue an executive order stating as much? Why not just have a gentleman's agreement that the law will not be enforced?

[tangent4ronpaul]

http://www.washingtonpost.com/busine...47f_story.html

It’s not just milk that’s in limbo. The farm bill also includes disaster relief for farmers and foreign food aid that expired Oct. 1 because of inaction by Congress.

And if Congress does not pass the bill by March, when it’s time for farmers to start planting crops, the antiquated laws could begin to roil production for other products, from peanuts to corn, by applying quotas discarded years ago.

“It would be an administrative nightmare,” said James Dunn, professor of agricultural economics at Penn State. “The farmers would lose a lot of flexibility in what they produce.”

The milk situation is immediately dire because milk is produced throughout the year.

At the heart of the trouble is an old provision designed to create a floor for how much dairy farmers are paid for milk — a kind of minimum wage. The formula for calculating that price, however, is based on assumptions that are a century old, predating the improvements in dairy farming. That old formula, if not replaced by a new farm bill, would push prices higher.

How much higher is difficult to determine because of the complexity of milk pricing. There are middlemen who help determine the price of the supermarket gallon, including processors and companies such as Dean Foods that market dairy products to consumers.

The government’s dated mechanism for controlling the price of milk is also remarkably indirect. The USDA in effect offers to buy bulk butter, nonfat dry milk and cheddar cheese in blocks and barrels in order to alter the price of milk. (The government bought so much cheese in the early 1980s that it had to give it away to families.) Such a process wouldn’t cause prices to spike overnight.

...

Farm subsidies have drawn controversy over the years, with some questioning their necessity. Dairy program subsidies have cost $4.9 billion from 1995 to 2011, ranking ninth among farm commodities, according to data compiled by the Environmental Working Group, an advocacy group. Corn has received the most, with $81.7 billion during the same period.

The price of milk, however, is largely determined by market forces. In fact, many farmers have been pushing for more financial support from the government as the number of farms has plummeted in recent decades.

Dairy farmers have faced a brutal year, with the country’s historic drought driving up the cost of feed for cows and the price of milk staying too low to help their margins.

“If this doesn’t turn around, then we won’t have a dairy industry as we think of it in the United States,” said Loren Lopes, a 66-year-old dairy farmer in Turlock Calif. Lopes’s farm milks about 500 cows. Many dairies are shutting down, said Lopes, and his son, who is 40, isn’t sure if the business is right for him anymore.

-t

[tony m]

So a better question is what's in the new farm bill?

Patriot Act III
or
Banning all guns in the US?

-t

There is a good chance there would be something in there to gain more control.

[tangent4ronpaul]

http://nationalhogfarmer.com/busines...-parity-prices

What is the impact of the delay?

But how does that delay impact agriculture, consumers and the food merchandising system in the United States?

Livestock producers were promised they would get financial benefits from several USDA programs designed to indemnify producers from the drought of the past summer, but they were paused in the committees. They include:



1. Livestock Indemnity Program (LIP), which would compensate ranchers for a portion of market value for livestock mortality caused by a disaster (65% in Senate bill, 75% in H.R. 6083);



2. Livestock Forage Disaster Program (LFP), which would compensate for grazing losses due to qualifying drought conditions or fire on rangeland managed by a federal agency (the Senate bill increases the payment amount from the 2008 farm bill in some cases);



3. Emergency Assistance for Livestock, Honeybees, and Farm-Raised Catfish (ELAP), which would provide annual funding of $5 million (Senate bill) and $20 million (House committee bill) to compensate producers for disaster losses not covered under other disaster programs.



Any government support programs, such as direct payments, marketing loans, ACRE are in effect for a commodity until the end of the current marketing year. For example, that will be June 30, 2013 for wheat and Aug. 31 for corn and soybeans. However, the dairy support program ended Sept. 30, 2012 without any replacement. Under 1949 Permanent Law, parity prices become effective Jan. 1, 2013 for any commodity for which the Permanent Law has not been suspended. (Typically, each new Farm Bill suspends the 1949 legislation, but that has not happened.) Subsequently, at the expiration of the current marketing year for a commodity, familiar commodities will have some unfamiliar prices that the USDA says producers shall be paid. USDA economists calculated those prices at the end of November to be:

Corn: $12.00/bu.
Soybeans: $28.90/bu.
Wheat: $18.30/bu.
Beef cattle: $292.00/cwt.
Hogs: $160.00/cwt.
Milk: $52.10/cwt.

Parity prices for a multitude of other commodities are calculated monthly by USDA statisticians in the National Agricultural Statistics Service. The November 2012 report of commodity prices contains parity prices on pages 30 and 31.

Parity prices are part of an economic base for agriculture using the relationship between market prices and the cost of production between the years of 1910-1914. While this formula worked 100 years ago, there are few, if any, who believe it would work today. Nevertheless, that is where we are. Flinchbaugh’s observation on parity price suggests a doubt that Congress knows what the result of inaction will be. “What does that mean for 2013? That is very interesting to contemplate. If we don't amend the permanent legislation, the 2013 crop will be covered by an ancient non-recourse loan program. A floor would be put under prices at between 50 and 90% of parity. Parity is based on a 1910-14 purchasing power index. That means we have a 100-year old policy.

“Parity prices for 2013 include wheat at $18, corn at $12, beans at $27, cotton at $2 a pound, milk at $52 a hundredweight. Secretary of Agriculture Tom Vilsack will be required to hold producer referenda by April on marketing quotas and production controls on wheat and cotton.

“Who loves this? Our competitors. Our Canadian friends think it’s great because we'll put a floor price down and they'll beat us on prices and our grain will be in government storage. I don't think agriculture has awoken to this. I don't think they know how inept this is.”

One of the more immediate issues is the impact of the lack of farm policy on the U.S. dairy program. Beginning Jan. 1, 2013, the lack of a dairy program will force the USDA to begin implementing the 1949 Permanent Law for dairy producers. In brief, that will require the USDA to purchase milk, store it as cheese and powdered milk, and remove enough of it from the market to cause prices to rise from the current $18/cwt. to the parity price of $52/cwt. Such a shortage of milk is expected to push consumer prices into the $6 to $8 per gallon range.

One of the more outspoken critics of the lack of farm policy inaction is Sen. Patrick Leahy (D-VT) who addressed the Senate Dec. 21. He said, “The secretary of agriculture and his staff have been -- quite literally -- dusting off old paper files and mimeographed notes from the 1940s and ‘50s to review the Agricultural Act of 1949….This archaic law will force the federal government to spend billions of dollars to buy and store dairy products to help raise the price of fluid milk for dairy farmers. The secretary will have to keep spending until he is able to raise the price of fluid milk by 60 or 70%…..Never before has the Farm Bill expired like this. And now on Jan. 1, we will implement market-distorting dairy policy so old that 49 current members of the Senate -- including the chairwoman of the Senate Agriculture Committee -- were not even born when it was signed into law by then-President Harry Truman.”

======
Bottom line - the cost of food may double.

-t

[angelatc]

Federal umemployment benefits also expire. The media is waiting to yelp about that until after the 1st, I suspect.

[Confederate]

Solution: government should stop buying milk.

[acptulsa]

Why not just void that old law? Why not just have the president issue an executive order stating as much? Why not just have a gentleman's agreement that the law will not be enforced?

When did REPEAL become a four-letter word? Did they pass a law that makes repealing laws against the law?

The easiest way to make this nation a much better place is to repeal about 90% of the federal legal code. I told our representative-elect that every bill he introduces should have the word 'repeal' in it. That's what I would do, were I on Capitol Hill.

Solution: government should stop buying milk.

This is very true. If the 1949 law will affect all milk prices merely by affecting what government forces itself to pay for milk, then obviously the government buys too much milk. And fixing this, too, is easy--whatever act causes the government to buy milk should be repealed. How obvious is that?

[tangent4ronpaul]

Farm Bill looms as biotech battleground next year
http://www.agra-net.com/portal2/ptcn...01&pubid=ag100

Food labeling won't be the only biotech battleground next year. Another major area of conflict is the deregulation of biotech crops, which the industry wants to speed up and opponents want to slow down.

Pesticide & Chemical Policy has talked to numerous biotechnology stakeholders in preparation for its annual regulatory outlook series. The speed at which genetically engineered crop crops get approved is going to be a source of much attention in 2013, they predict.

-t

[oyarde]

I want the USDA eliminated , I could care less what a gallon of milk costs.Only way I can drink that is a white Russian .....