Dairy farmers in the Northeast and Midwest are nervously looking to the future now that their safety nets have vanished with the expiration of the farm bill.
Despite pressure from across the farm community, Congress refused to take action on the farm bill (with the House of Representatives refusing to even bring it up for debate before the 2012 election). While farm officials have reassured farmers that roughly 75 percent of farm programs will be funded through the end of 2012 and into 2013, dairy farmers are currently facing the elimination of most of their subsidies.
The reason for the continued funding is a quirk in the farm bill’s funding mechanism (which covers crops planted this year and harvested next year). These provisions do not apply to dairy farmers, who lost virtually all their federal funding with the expiration of the 2007 Farm Bill.
This comes as bad news for a dairy sector already struggling with low milk prices and high fuel and feed costs. In particular the loss of the milk income loss contract (which pays dairy farmers when milk prices fall below a certain point) will likely hit struggling dairy farms hard.
The loss of the safety net has provoked panic in the dairy sector (which had already seen a wave of bankruptcies and farm closures).
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Written by: Justin Ellison / Farm Plus Staff Writer