A Farm Bill has passed the House Agricultural Committee as the process to approve the new version begins. From a dairy perspective, the document includes an increase to the cap on the Dairy Margin Coverage (DMC) program’s Tier I level to six million pounds (up from five million pounds), allows producers to update their DMC production history, gives a 25% discount to farmers who enroll in DMC for the duration of the 2024 Farm Bill, changes the Class I formula to the “higher-of” calculation, requires manufacturing cost surveys every two years, and keeps the Dairy Forward Pricing Program intact. It also contains language about full-fat milk in school lunches. The Class I formula is a hot topic, and the language in the bill states that even if the “higher-of” formula is enacted, the FMMO will defer to the updates that are ratified as part of the current rulemaking process. This means that a change could take place, only to be undone a short while later by the FMMO reforms.
The passage of a new Farm Bill hinges on alignment between the House and Senate, a process that can only begin once bills have passed both bodies. Currently, the Senate Ag Committee has not aligned or discussed a proposal, a step that needs to be taken before a vote by either chamber. Likely steps after a Senate Ag Committee approval include the formation of a Conference Committee, an ad hoc panel composed of House and Senate conferees to create a singular bill, and a final vote within each chamber. Finally, the bill would be sent to the President for approval.
Source: USDA, Economic Research Service
While the Senate Ag Committee has not released language of its own, Majority Leader Senator Stabenow has offered a framework entitled The Rural Prosperity and Food Security Act of 2024, which contains similar language to the House regarding DMC production history, Tier I coverage, and discounted premiums. The Act also proposes an extension of the Dairy Forward Pricing Program (as opposed to permanency) and requires manufacturing cost surveys bi-annually. While school lunch incentives are a part of the legislation, there is no language around the inclusion of full-fat milk. In Dec 2023, Stabenow blocked the passage of a bill that would have allowed full and reduced-fat milk back into school lunches, citing concerns that the school lunch program was in the midst of updates and dietary science needed to be considered. Additionally, Senator Stabenow’s framework does not include anything pertaining to the FMMO Class I price formula.
While the Farm Bill has passed one important step, bipartisan support remains a challenge in both chambers of Congress. Democrats and Republicans are at odds over three key areas: the Supplemental Nutrition Assistance Program (SNAP), climate-smart programs, and the Commodity Credit Corporation (CCC). SNAP makes up over 80% of Farm Bill spending, and Republicans would like to reign in the rapid increases over the past few years, preventing future presidents from lifting benefits outside of inflation measures. It will not reduce current spending, but it will freeze it. On the other hand, Democrats have been clear that they would like the ability to increase levels and have voiced concerns over suspending spending. Furthermore, both parties would like to see farmers receive funding for climate-smart programs and utilize dollars allocated by the Inflation Reduction Act of 2022. However, Democrats would like the money to go solely to climate programs, while Republicans want the funding to be available for any conservation program. Lastly, the CCC disagreement stems from Republicans’ desire to suspend USDA’s Section 5 spending authority and instead push that funding toward other programs.
With impending Presidential elections and the normal cadence of Senate and House campaigning, it seems unlikely that a new bill will pass in 2024. Because of this, it is anticipated that a continuing resolution or extension to the current Farm Bill will be passed come September. Still, Congress will be in a lame-duck session after November’s elections, and Senator Stabenow is retiring. If some Congressional members are not re-elected or Stabenow would like to see the legislation pushed through ahead of her exit, perhaps something could be passed, although this seems like an unlikely scenario.
Did you know that HighGround Dairy’s subscribers receive breaking news updates right to their inbox? Don’t miss out! Sign up for a free 30-day trial today.
The post Farm Bill Passes House Ag Committee, What’s Next? appeared first on HighGround Dairy.