Despite predictions of milk price spike, dairy farmers not worried yet [The Times and Democrat, Orangeburg, S.C.]

Oct. 21--Some local dairy farmers say warnings of a spike in dairy prices should Congress fail to pass a farm bill by year's end are based on "scare tactics" and politics.

"Milk is not priced like that," Bowman dairy farmer Archie Felder said. "We know in advance what milk will bring."

Felder, who milks about 550 cows near Bowman, said milk is priced according to the federal milk order which regulates handlers that sell milk. It requires the handlers to pay no less than an established minimum price for the Grade A milk they purchase from dairy producers.

Dairy producers are paid per 100 pounds of milk -- called a hundredweight.

Felder said there is skim price and butterfat price each month based on a variety of factors such as supply, demand, export market and the amount of each product in storage waiting to be sold.

"Milk is not priced on a weekly basis or by something that can happen overnight," Felder said. Also, "I don't see it having any impact on prices. It has not had any impact yet. Milk cannot go that high because it won't sell. It just won't happen. I would bet the farm on that."

Congress is a year behind schedule in writing a successor to the 2008 farm law, which expired a year ago and was revived early this year. It died again at the same time the government went into a partial shutdown.

Bowman dairy farmer Barry Berry, who milks about 275 cows with Clint Berry, agrees with Felder.

"I think it is trying to scare the public," he said. "I don't think any of that will happen. I think this is all politics."

Berry said the failure of Congress to do its job makes him a little aggravated.

"You can't quit living just because they can't make a decision," he said.

South Carolina Farm Bureau President David Winkles stands by his frequent statement that milk prices will spike to about $8 a gallon if something is not done.

If a new farm bill is not passed, 1936 and 1949 laws for compensating dairy farmers for production costs will be used. But it may take time for that to happen.

"It takes until sometime in January and February for it (farm bill) to unwind," Winkles said. "I don't think it is a fair statement to say that it is not going to happen."

However, Winkles did say he thinks it is highly unlikely prices will spike because he foresees a farm bill being passed before it comes to that point.

Winkles said the threat of a reversion to previous laws has served as a motivating factor to have a bill signed.

Farm Bureau is concerned the current House version of the farm bill does away with the older laws, meaning a permanent law would make it more difficult to adjust safety nets as conditions in agriculture change, Winkles said.

"It gives us pause that there will not be a motivation to have another farm bill passed," he said.

Felder says he is more concerned about the lack of a farm bill's impact on subsidies related to dairy feed such as soybeans and corn. He said the price of feed has been through the roof.

"It has taken any profit margin away," he said. "Your input costs are so high when it comes to buying equipment and buying feed."

Felder said milk prices are about $21 per hundredweight, which may sound good, but the costs are a lot higher than they were five years ago.

"We are surviving but we can't buy a lot of new stuff," he said.

Orangeburg County Clemson Extension Agent Jonathan Croft said farmers have not mentioned any concerns to him about not having a farm bill.

He said most farmers are expected to base future plantings on normal crop rotations, though some farmers may base plantings on whether a farm bill is in place.

"Some of their operational money comes through loans backed through the farm bill programs," he said. "Those will base planting on what programs are available in either having a farm bill or whatever might come out of this government shutdown."

Croft said he personally is seeking a farm bill that provides "stable risk management" to help provide a stable food source for Americans.

Calhoun County Clemson Extension Agent Charles Davis described both the government shutdown and the failure to pass a farm bill as messes.

"Our biggest concern on the farm bill is not knowing anything," Davis said. "You don't know what kind of plans will be out there, what kind of programs that are available for farmers are all big question marks right now."

Davis said the immediate uncertainty surrounding the lack of a farm bill should not impact farmers planting plans for 2014 because planting is "market driven," though the lack of a farm bill does add a little more concern.

"It is kind of like going to work and knowing you will get paid but not knowing what the pay rate is," he said. "You are going to go to work anyhow and roll the dice. When you don't know what the farm program offers, that can be difficult."

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