Futures markets and traders are predicting that Congress will quickly resolve the looming farm bill catastrophe in the lame duck congressional session, motivated in part by the potential fiscal calamity facing the country if they fail to act.

At the beginning of the month, U.S. farm policy officially reverted back to the last permanent farm law passed by Congress in 1949. This legislation, if it goes into effect, would eliminate nearly every Department of Agriculture program currently in existence. In addition, it would dramatically increase farm prices and limit farm production.

The result would be a major financial hit to American consumers. Some financial analysts have predicted that wheat prices would increase by half, milk and cotton prices would double, and rice prices would increase by 41 percent.

Futures markets, however, are still predicting crop prices well below these potential increases. In essence, the futures market is betting that the threat of 1949 farm policies will force to Congress to put aside partisan bickering and come together to pass a new farm bill.

“The reason it’s there [referring to the obsolete permanent farm legislation] is to force Congress to do their due diligence and get a farm bill passed,” said Bing Von Bergen, vice president of the National Association of Wheat Growers.

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Written by: Justin Ellison / Farm Plus Staff Writer