Every five years, work on the farm bill becomes a focus in both the House of Representatives and Senate. As Congress begins to wrestle with the nutrition and agriculture portions of the bill, they are looking at the first ever version that is expected to exceed $1 trillion. During the January 11 Hoard’s Dairyman DairyLivestream, legislative experts Charlie Garrison and Dave Carlin weighed in on what to expect from the forthcoming bill.

“The current farm bill expires on September 30. I don't believe that Congress is likely to let the farm bill expire because that sends spending through the roof,” detailed Garrison, who is the executive director of The Garrison Group.

Instead, Garrison expects Congress to either get a new bill passed or extend the current bill. Looking at historical precedent, the last three farm bills have been rather difficult to come to an agreement on.

“It really wasn't that long ago that farm bills were viewed as relatively non-controversial in Congress, and they were routinely passed with bipartisan Congressional support on both sides,” said Carlin, who covers legislative affairs for the International Dairy Foods Association (IDFA).

More recently, the farm bill passed in 2008 took more than a year to implement, 2014’s took 21 months and two Congresses, and the 2018 bill took a full eight months. With that in mind, we are likely in for a long ride.

“In the House, a Republican study committee has already called for large funding cuts to the crop insurance program, commodity programs, and the overall farm bill baseline,” explained Carlin. “The budget for the farm bill has not yet been determined, but we're also going to have to probably accommodate a new federal disaster relief program in the bill that will address the growing number of droughts, wildfires, floods, and other disasters that are affecting agriculture production.”

Major dairy focuses

Dairy will have a lot to consider with the upcoming farm bill, including risk management tools.

“As far as the farm bill is concerned, the economic safety net part of that for farmers includes the Dairy Margin Coverage program,” detailed Garrison. “I think you'll have folks looking at improving the no cost coverage that is available, and I think also you'll see requests to raise the coverage volumes that are allowed in that program.”

Conservation programs will also be part of the farm bill considerations including Environmental Quality Incentives Program (EQIP) that has been very helpful for dairy farmers.

“We need to increase the funding or at least hold what we have right now and keep the 50% emphasis on livestock agriculture that's written into that program,” said Garrison.

IDFA also has a few priorities related to the Supplemental Nutrition Assistance Program (SNAP) portion of the bill.

“First and foremost, we want to expand a pilot program that was put in place in 2018 to encourage SNAP households to use their benefits to purchase dairy products,” said Carlin. “It's called the Healthy Fluid Milk Incentives project, and it's similar to a program that's already been in place for a couple of farm bills now for fruits and vegetables.”

The program offers SNAP participants a dollar for dollar coupon or rebate when a qualifying fluid milk product is purchased to put toward another dairy product purchase, according to Carlin.

IDFA is also encouraging a change that will affect make allowances.

“Another thing we hope to achieve in the farm bill is providing USDA with the authority to conduct regular cost of processing studies,” explained Carlin. “That study helps determine what it costs to produce the four dairy commodities that are part of the federal milk marketing order prices. That's Cheddar cheese, butter, dry whey, and non-fat dry milk.”

The last two studies were done in 2021 and 2007. Carlin argued that the infrequency of the studies makes cost of production out of touch with current supply chain difficulties.

“The current make allowance formulas are based on cost information that was in place in 2007 and 2008,” he said. “That’s considerably different than the inflationary pressures and supply chain challenges of the last couple of years. We want to give USDA the authority to conduct regular cost and processing studies so that we have more regular updates. If we do this more often, it'll be easier for everybody to manage.”

To watch the recording of the January 11 DairyLivestream, go to the link above. The program recording is also available as an audio-only podcast on Spotify, Google Podcasts, Apple Podcasts, and downloadable from the Hoard’s Dairyman website.

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(c) Hoard's Dairyman Intel 2023
January 26, 2023
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