Democrat's latest farm bill strategy: Threaten to double the price of milk

The top Democrat on the House Agriculture Committee has launched a new strategy for passing a farm bill this year: threaten to send milk prices skyrocketing.

Rep. Collin Peterson (D-Minn.) said he called Secretary of Agriculture Tom VilsackTom VilsackUSDA: Farm-to-school programs help schools serve healthier meals OVERNIGHT MONEY: House poised to pass debt-ceiling bill MORE this week suggesting that the agency begin the process of implementing the 1949-era dairy policies that would take effect Oct. 1 if Congress fails to act on a farm bill before then.


"Clearly this is not going to get done by the 1st of October, so my suggestion to the secretary is that they should start now putting the framework together to implement the permanent law on dairy Jan. 1," Peterson said Wednesday in the Capitol. "And it sounds to me like they're going to take a very serious look at that."

The 1949 law requires the Agriculture Department to manipulate the dairy market in such a way that milk is priced at a floor of roughly $39 per 100 pounds — a figure that would lead milk prices to roughly double at today's rates.

Peterson's strategy is not to see that happen, but to rouse the affected industry groups, particularly the powerful International Dairy Foods Association (IDFA), into pressuring  Speaker John BoehnerJohn Andrew BoehnerRift widens between business groups and House GOP Juan Williams: Pelosi shows her power Debt ceiling games endanger US fiscal credibility — again MORE (R-Ohio) and other GOP leaders to enact a bill preventing the cost hike.

"IDFA is really going to hate this," Peterson said. "And once Vilsack's calling them and setting up the mechanism to get $39 milk, IDFA's going to call BoehnerJohn Andrew BoehnerRift widens between business groups and House GOP Juan Williams: Pelosi shows her power Debt ceiling games endanger US fiscal credibility — again MORE. So, it might actually work."

Peterson said his strategy has the backing of House Minority Leader Nancy Pelosi (D-Calif.).

Congress has struggled for years to pass a long-term reauthorization of the farm bill, relying instead on short-term extensions to existing policy that have prevented the permanent law of 1949 from taking effect.

In June, the Senate passed a five-year reauthorization bill with a bipartisan vote of 66-27, but House GOP leaders declined to consider it, arguing that the $4.1 billion cut in food stamps was not large enough to satisfy their conservative conference.

Instead, House Republicans carved their version of the bill into two pieces: The farm policy portion passed in July with no Democratic support, and GOP leaders are planning this month to bring up a food stamp bill expected to cut roughly $40 billion from the program.

Democratic leaders are warning that a cut of that size — designed to appeal to House conservatives — has no chance of passing in the Democratically controlled Senate, leaving farm bill stakeholders to wonder where there's room for a compromise.

Peterson thinks his milk strategy can compel the deal that's so far eluded the two sides.

"The first thing that happens of any consequence is Jan. 1 on dairy. So if he [Vilsack] starts the process [Oct. 1], then we can be ready to have $39 milk Jan. 1," he said. "And then I think, within two or three weeks, we'll probably have a farm bill.

"We're not getting any place with what we're doing," Peterson added. "There's no reason to not have this done."

Committee Chairman Frank Lucas (R-Okla.) said Wednesday that Vilsack should start to prepare for the milk spike.

Lucas said he didn't know exactly why the prices would rise but told a reporter he'd have to save his beer money to afford milk.

Lucas said leaders have not yet started whipping the food stamp cutting bill they plan to bring to the floor next week. He said even if House Majority Leader Eric CantorEric Ivan CantorBottom line Virginia GOP candidates for governor gear up for convention Cantor: 'Level of craziness' in Washington has increased 'on both sides' MORE (R-Va.) cannot get 217 votes for the measure cutting $40 billion, a farm bill conference committee would proceed.

Disagreements on food stamp cuts have been the main obstacle to a farm bill, he said. 

"Addressing that bill, disposing of that bill ... up or down ... enables us to move forward with the conference committee process," Lucas said.

— Erik Wasson contributed to this report.