Milk Prices, Again

Seems like this comes up every year or so. And it’s one of those stories that makes it tough to know where to begin.

Why $7-Per-Gallon Milk Looms Once Again : The Salt : NPR “The leaders of the House and Senate agriculture committees are meeting Wednesday as they continue to try to work out the differences between their respective farm bills. If they fail, the country faces what’s being called the “dairy cliff” — with milk prices potentially shooting up to about $7 a gallon sometime after the first of the year. Here’s why: The nation’s farm policy would be legally required to revert back to what’s called permanent law. In the case of dairy, that would be the 1949 farm bill.”


>> “And if House and Senate negotiators fail to reconcile their farm bills, U.S. Agriculture Secretary Tom Vilsack warns, ‘I’m going to be put in a position where I have to invoke and implement permanent law. And I will do my job because that’s what I swore an oath to do.’

I’m going to assume that Vilsack also took some kind of oath to uphold the U.S. Constitution. I bet his copy doesn’t have any mention of the of the 1949 legislation.

>> “The problem is that back in 1949, the dairy industry was much smaller and less efficient than the one that exists today, so it received bigger price supports from the federal government.

At first glance, this statement seems like a non-sequitur, on second glance, too.

>> “”It’s a great lever to compel action,” he says of the invocation of permanent law that hovers over every farm bill. ‘In most cases, it’s the reason why we’ve had fairly routine extensions of the farm bill for the past 50 years.’ Rep. Mike Conaway, a Republican from Texas and a member of the farm bill conference committee, agrees with Vilsack’s assessment. ‘It’s applying pressure to me,’ he notes. ‘That’s the whole advantage of having permanent law that’s as bad as it is: to try to get folks to create the new law that we need for the next five years.’”

Instead of feverishly working each time this comes up to extend the farm bill, why not spend the time getting the 1949 legislation off the books?

Related Links:
Munger on Milk – EconTalk
The Milk Cartel
How Govt. Warps Markets and Prosperity: Milk Edition
Milked - Cafe Hayek