Tough times in the dairy industry are not lost on U.S. Secretary of Agriculture Tom Vilsack.
Speaking to a World Dairy Expo gathering on Tuesday, Vilsack acknowledged there have been “significant price spikes and very deep depressed prices” in recent years.” And the time interval between those spikes is shortening so that producers don’t have the time to rebound from difficult years, he added.
Against that backdrop, he expressed frustration at the inability of Congress to get a new Farm Bill passed.
Versions of the Farm Bill that got through the U.S. Senate and House Agriculture Committee would have provided margin protection to help insure against unfavorable swings in feed prices relative to milk prices. But a final vote on those proposals was held up by the House leadership.
While controversial in some aspects, those proposals (also known as the Dairy Security Act) were “a recognition that dairy can’t continue to have the instability and volatility that we’ve seen over the course of the last 10 to 15 years,” Vilsack said.
Now, with the Farm Bill facing an uncertain future, there is speculation that milk prices could reach $38 per hundredweight ― actually, the range could be $38 and $50, Vilsack says ― if nothing gets done by Jan. 1. At that point, the dairy price support level will revert back to permanent law passed In the 1940s, which includes parity pricing.
While that may sound like good news for dairy farmers, such a spike in milk prices would have a ripple effect throughout the entire supply chain, Vilsack pointed out. That, in turn, could impact consumer choice and have people looking for alternatives to milk if milk becomes too high-priced.
While Congress gets most of the blame for not passing a Farm Bill, Vilsack said it’s also difficult to get things done when dairymen themselves are divided on the issues.
“As I travel around the country, what I've noticed (is) dairymen and dairywomen have a hard time agreeing,” he said. “The problem is we have not had consensus and that’s made it difficult for us to get a program that would allow some stability and some protection.”